REPORT 2018—2019
The secret sauce OF BOLT, PRINTFUL, AND OTHER CULTURE-DRIVEN COMPANIES
Biggest investment deals WHO RAISED THE MOST IN 2018/2019? in the Baltic tech scene tech Baltic in the Hiring challenges
in the Baltics girlpower WHAT CAUSES HEADACHES FOR THE REGION’S FAST-GROWING STARTUPS? # BALTIC STARTUP SCENE Report 2018—2019 THE BALTIC STATES IS A BOOMING SPACE FOR STARTUPS
Despite their small size, the three Baltic countries are showing im- pressive results in digitalization and being a booming space for This is the second time the Start- startups. Continuously ranked up Wise Guys accelerator and EIT among places with best tax re- Digital join their forces to publish gimes, ease of doing business, and the Baltic Startup Scene Report. tech savviness, the Baltic states While each Baltic country regu- are quite an interesting phenome- larly comes up with data and re- non in the European startup scene. ports, the region is rarely analyzed Estonia alone is home to some of as a whole and benchmarked with Europe’s fastest growing compa- other countries and regions in Eu- nies – including four unicorns. In rope. the meantime, the neighbouring countries of Latvia and Lithuania Last year’s report was well-re- are also catching up. ceived – 500 printed copies were distributed among stakehold- ers from the Baltics and abroad. There were also close to 1000 downloads of the digital version of the report. For some time, the international perception of the Baltics was synonymous with Estonia. Recently, however, Latvia and Lithuania have been striding towards closing the gap. So, what is the status now? Are the ecosystems closer in development than outsiders consider them to be? This report sheds light on the true case of the Baltic ecosystems, and where they stand in the larger European context. After publishing the first report in 2018, we saw deep curiosity Fabio Pianesi and positive rivalry among EIT Digital Baltic ecosystem players. In the meantime, many stakeholders from abroad, like investors, tech journalists, CxOs of corporations, were impressed with how the small Baltic countries have managed to be frontrunners in all things digital and startups. We were happy to see that data combined with quality insights sparked in them a deeper interest in Baltics. Therefore this year we have kept the best from the first report, but also upgraded and added more founder stories and experiences, indicated some challenges faced by ecosystems and startups, added a new section on women in tech and top events to attend, listed not only local, but also foreign VCs interested in the Baltics, and last but not least – added new verticals to our curated Startups to Watch list. We hope you will enjoy this report!
Zane Bojare Startup Wise Guys
BALTIC STARTUP SCENE Report 2018—2019 5
CONTENTS
Baltics in a Nutshell
8 Investment & Funding
10 Biggest Deals Benchmark Blockchain and the 12 aftermath of the ICO Baltic Benchmarking craze 16 with Europe
Living & Working 18 in the Baltics
Startup Visas in the Ecosystem 22 Baltics & Europe
Tech Events in 28 The Baltics
Startup Funding 31 in the Baltics Longer Reads Startup Accelerators 35 Access to talent in the 62 Baltics – what challenges 38 Baltic Women in Tech do local startups face?
Company culture in the Corporate Innovation 65 Baltic startup scene 41 in the Baltics
Where in the world are 67 Baltic startups?
Startups to 44 Watch
BALTIC STARTUP SCENE Report 2018—2019 BALTICS IN A NUTSHELL
BALTIC STARTUP SCENE Report 2018—2019 7
BALTIC STARTUP SCENE Report 2018—2019 8 Baltics in a Nutshell
STARTUPS & INVESTMENT
NUMBER OF STARTUPS (AS OF JULY 2019) & INVESTMENT PER CAPITA (2018)
Estonia Latvia Lithuania
Startups per 10,000 inhabitants
3.3 4.9 650 2.7 518 920
Number of startups
Total investment
€ 329.6M € 183.3M € 85.2M 65.06 248 44.37
Investment per capita
Source: Latvian Startup Association, Startup Lithuania, Startup Estonia, Ministry of Economics of Latvia
FACT 01
In 2018, Latvia and Lithuania saw a significant increase in the amount of startups documented. For example, Lithuania reported 572 more startups than the year before, while the number of Latvian startups grew by 66.
Startup Wise Guys publicity photo
BALTIC STARTUP SCENE Report 2018—2019 9
Lithuania saw impressive funding growth in 2018 – by 788% when STARTUP compared to the year before. That being said, CityBee’s €110M investment accounts for as much as 60% of the total investment FUNDING raised in that year.
Since 2013, Estonia has seen a However, Latvia is still lagging behind Lith- linear funding growth – in 2018, uania and Estonia. The funding data shows that in 2018, Latvia raised 2 times less than FACT there was a 21.4% increase when Lithuania and nearly 4 times less than Es- 02 compared to the year before. tonia. The reasons behind this difference Both local and foreign VC funds vary – bureaucratic obstacles and insuf- and business angels are actively ficient industry support at a national level investing in Estonian startups, are some of them. contributing to the country’s Finally, Lithuania has demonstrated in- efforts to brand itself as an creased funding activity when compared to previous years. That is partly related to EU funding and other public intervention innovation hub. the fact that public authorities have made a give a huge boost to the startup ecosys- Investments in Latvian startups are also decision to dedicate a part of EU Structur- tem. In 2018/2019, new equity funds were continuing to grow. According to the Min- al and Investment Funds to various equity launched in Lithuania, including acceler- istry of Economics of Latvia, in 2018 local instruments, like accelerator funds, seed ators financed from EU structural funds. startups attracted 85.2 million, which is and venture capital funds, development That gave another impulse for the devel- over 30% more than in 2017. (growth) funds, and business angel co-in- opment of the ecosystem – there was an vestment funds. increase in the number of investments, as well as more possibilities for startups to get acceleration services and initial in- vestments,’’ explains Vilija Sveikauskiene, Senior Project Manager at INVEGA. FUNDING GROWTH OVER THE LAST 6 YEARS
Estonia Latvia Lithuania 329.57 PER CAPITA
300 300 250.43
225 182.4 200
150
100 64.00 75 85.2
44.37 0 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Google Public Data, Baltic Startup Scene Report 2017/2018, crowdsourced data (Estonia, Latvia, Lithuania), Dealroom.co, Ministry of Economics of Latvia
BALTIC STARTUP SCENE Report 2018—2019 10 Baltics in a Nutshell
BIGGEST DEALS
In 2018 and up to Q3 of 2019, Estonian, Latvian and Lithuanian startups contin- BIGGEST FUNDS ued to attract funds, with the biggest deals exceeding one hundred million eu- RAISED BY BALTIC ros. STARTUPS IN 2018 AND Estonia is still the leader within the Bal- tics – 7 out of the 13 biggest deals in 2018 2019 (Q1-Q3), IN EURO. and 3 out of the 5 top deals in 2019 (Q1-Q3) belong to Estonian startups. For Latvia, the size of the most notable deal was 80 150 million euros, raised by the blockchain startup Bitfury. And while we haven’t included data from 2019 Q4, it needs to 2018 2019 be noted that Lithuanian startup Vinted raised 128M euro in the end of November, Lithuania thus becoming the first Lithuanian uni- 150M corn. Bolt*
110 Latvia
CityBee** Estonia 100M 80
MOBILITY BitFury 300M 60
51.57 Bolt 50 200M 42.9 Monese 50M Vinted 37.54 Pipedrive Zego
21 100M SAAS FINTECH BLOCKCHAIN 18 15.4 13.5 Starship 11 11 10.4 50M FASHION Technologies Glia INSURTECH 10M 9.71 Transfergo Realeyes Realeyes 5 ROBOTICS Globitex Forty Seven 7.6 10M SOUNDTECH GAMING Bank Coolbet Sonarworks
Source: crowdsourced data (Estonia, Latvia, Lithuania) * Investment received as Taxify, before rebranding to Bolt Ministry of Economics of Latvia ** Investment by the parent company ModusGroup
BALTIC STARTUP SCENE Report 2018—2019 11
Bolt (ex. Taxify) was founded in Estonia, but the business idea was born in Kyiv, Ukraine, when one of the co-founders, Martin Villig, was visiting the city. He tried to order a taxi online, but that turned out to be quite a hassle. That’s when he came up with the idea and decided to make ride-sharing easier.
FACT 03
EXPERT COMMENT 01
Does rebranding impact further investment attraction?
We rebranded to Bolt in 2019 to bring the brand identity in line with the company’s broader vision of transportation that had already expanded from ride-hailing, with cars and motorbikes, to scooter sharing and more. However, our investors trust us because of our track record and vision, rather than the name.
Marek Unt Director of Communications, Bolt
BALTIC STARTUP SCENE Report 2018—2019 12 Baltics in a Nutshell
BLOCKCHAIN AND THE AFTERMATH OF THE ICO THE JOURNEY FOR CRAZE TRUST
Last year it was mostly Lithuania shining in It is possible that in the light of fraud and The ICO gold rush has ended, the media headlines about ICOs and raising scams, serious founders launching ICOs and as the dust settles, only the a reported $500M in ICOs and ranking 3rd might favour the link with e-Residency and globally in raised funds. It has also brought the fact that people behind Estonian-regis- strongest are left standing. It some scam cases along, causing the Bank tered ICOs as holders of e-Residency status also makes way for true, lasting, of Lithuania to launch various investiga- have been checked by the Police and Bor- blockchain-based innovation to tions. This year it is Estonia that stands in der Guard Board, thus earning additional be launched and implemented the forefront, ranking as the 5th country trustworthiness. to create the groundbreaking globally by the number of ICOs, according to the ICO Bench report. The combination of changes foreseen by the Estonia’s flexible e-Residency program and The only Lithuanian-based ICO registered technology. slightly careful and strategic approach to in ICO Bench in 2019 was Swace, a gam- ICO regulation has led to many internation- ing-related project with an undisclosed al ICO projects to be registered in Estonia. amount raised, and is currently being ac- There are many online resources and busi- tively traded. Meanwhile, Latvia has been nesses established to help ICOs register in rather silent and has fallen victim of some Estonia. scam cases. For example, the Buratino ICO, which raised over $10.5M was registered in Latvia, though research shows founders are based in Saint Petersburg, Russia. FACT 04
The Ministry of Economics and the Latvian State Revenue service organised the Tax Blockchain Hackathon to look into ways how blockchain technology could be utilized for cash register and tax fraud prevention. The 48h challenge was driven by the Startup Wise Guys accelerator and gathered an international crowd of blockchain experts and enthusiasts from the Baltic and Nordic regions.
BALTIC STARTUP SCENE Report 2018—2019 The Ministry Republic The the of Economics of publicity photos Latvia of BLOCKCHAIN INITIATIVES IN THE BALTICS Now that the ICO noise has settled, more attention has been directed towards the serious blockchain projects that intend on making a difference. Here are a few of the blockchain initiatives that are currently relevant in the Baltics.
EXPERT COMMENT 02
The ICOs seem to have turned down their PR to a minimum, but still keep LBChain - on working on their products. For The Bank of Lithuania’s example, Monetha claims that it has blockchain sandbox finished working on its whitepaper and has fulfilled its obligations to The Bank of Lithuania was quick to identify Baltic HoneyBadger Bitcoin the token-holders, the question blockchain as a major opportunity for the remains - what do they do next? Lithuanian economy. For that reason, in Conference in Riga, Latvia In general, there is a lack of buzz 2018 it announced its intentions to develop a blockchain sandbox for blockchain-based For the third year in a row, one of the glob- about blockchain in the local startup projects to test their solutions on Lithu- ally leading Bitcoin conferences has been ecosystem but there is also no ania’s technological and regulatory infra- held in Latvia. It is organized by Hodl Hodl, active leader to facilitate this action. structure. The project moved into phase the P2P Bitcoin exchange. The event brings Civitta lately got into 3 pan-European two in 2019, with fintech startups being together globally leading individuals in the blockchain ecosystem development added to the sandbox to begin testing. 21 blockchain sphere and as they claim them- projects and will be funding up to 100 selves “The Baltic Honeybadger conference startups applied to participate in the sand- blockchain projects as part of the box, out of those - 6 were accepted. is driven by the cypherpunk movement. We’re not promoting various so called extended consortia. altcoins, ICOs, banks and other block- X-Road - Estonia’s chain-based “snake oil”. proprietary, decentralized New blockchain projects are hardly information system coming, if they do - they are financed through grants, rarely equity X-Road is the information system that laid investments. Hence, the European the foundation for the digitization of Esto- Commission and local EU grants have nia’s public services. X-Road went live in a major role to play during the crypto 2001 using the e-ID cards, and was placed market’s downturn in order to finance on the blockchain as of 2008. The imple- FACT 05 new action. There are corporates and mentation onto the blockchain was done serious SMEs across Europe steadily by an Estonian company named Guardtime, experimenting with blockchain, which remains the dominant blockchain builder in Estonia and is behind most block- Riga, Latvia is the birth-place however, they do almost no PR for it. chain-based innovations in the country. of BitFury group - the world’s largest full-service blockchain technology company. Danielius Stasiulis Civitta.ee, BitDegree 14 Baltics in a Nutshell BENCH MARK
BALTIC STARTUP SCENE Report 2018—2019 15
BALTIC STARTUP SCENE Report 2018—2019 16 Benchmark
Central Eastern European countries, which also include the BALTIC three Baltic states, had a record year in 2018 in terms of VC funding – startups based in or originating BENCHMARKING from this region managed to raise €1.3 billion. Baltic countries, especially Estonia and Lithuania, have significantly contributed WITH EUROPE to this record-breaking year and account for as much as 46% of the total amount raised in the CEE region.
The Baltic countries also look strong next to the Nordics – the region that is often named as one of the top-tier tech hubs in Europe. In fact, if we look at funding per capita, Estonia, Latvia, and Lithuania slightly out- perform the five Nordic countries. Their exceptional performance, however, has not extended into the CEE region, where the re- gion’s startup funding per capita still looks quite dismal in comparison. While attracting funds from local and for- eign VCs doesn’t seem to be a problem, it still leaves an open question – can the Baltics become a globally leading startup hub? Despite the general tech savviness, impressive funding rounds, unicorns and buzzing ecosystem, the region is still often associated with its Soviet past and remind- ed of its humble size of the market, namely six million inhabitants per all three coun- tries.
Startup Wise Guys Batch 10 off-site, founders from CostPocket and Pomodone app. Startup Wise Guys publicity photos
BALTIC STARTUP SCENE Report 2018—2019 EXPERT 17 COMMENT 03
Estonia’s growth has been STARTUP FUNDING IN particularly driven by e-Estonia and THE BALTICS, CEE AND a couple of good exits. However NORDICS, 2018 Estonia is more of a regional player, compared to London which is centralized, and I’m wondering if the region can be self-sustaining without finding people and funding from the € 598.1M outside. At the same time, the Baltics are more internationally-minded Baltics than other regional players like Latin America and until recently, France, which could be the leg up necessary € 1.3B to not rely on local markets. Raph Crouan CEE Disrupt Venture Including Estonia, Latvia, Lithuania
FUNDING PER CAPITA, 2018 € 2.28B
Nordics Sweden, Norway, Baltics Finland, Denmark, Iceland € 99.03
Sources: crowdsourced data (Estonia, Latvia, Lithuania), Ministry of Economics of Latvia, Dealroom.co
€ 85.08
Nordics
€ 4.42 CEE Including Estonia, Latvia, Lithuania
Source: Google Public Data, Baltic Startup Scene Report 2017/2018, crowdsourced data (Estonia, Latvia, Lithuania), Dealroom.co
BALTIC STARTUP SCENE Report 2018—2019 18 Benchmark
Life in the Baltic cities is COST OF LIVING comparably cheaper than in the LIVING & large startup hubs, like London, Paris, or Berlin. However recent 159.00 2.74 5.00 tendencies show – as local startup Tallinn 1114.81 WORKING ecosystems grow, so are company 487.00 3.18 11.00 maintenance costs and living Dublin expenses. 2475.41 149.00 2.42 5.00 IN THE Riga 1012.02 For example, Tallinn, the city with the arguably most matured startup ecosystem within the Baltics, is becoming increasing- 617.00 2.98 21.58 BALTICS ly more expensive over the years. That has motivated some of the country’s most suc- London 2724.75 180.00 2.18 4.35 cessful tech companies to open offices in other regions – not just to access custom- Vilnius 975.85 ers and investors in these markets, but also due to lower operational and employment costs. 370.00 3.00 16.75
Amsterdam 2461.12 542.00 3.47 11.23 Stockholm 1918.00
508.00 3.38 11.50 Paris 2059.44 277.00 2.37 4.59 Warsaw 1081.58
375.00 1.84 8.30 Barcelona 1620.61 488.00 2.70 13.90 Berlin 1768.19
155.00 1.54 5.85 Cost of living (moderate/low spending)*
Lisbon 1309.90 €800-1200 €2000-2400 407.00 3.31 7.83 194.00 1.09 2.88 €1200-1600 €2400-2800 Tel Aviv 2067.32 Kiev 805.10 €1600-2000
A fixed desk in a coworking space
Cappuccino, regular size
Taxi (5km drive)
TechChill publicity photo
BALTIC STARTUP SCENE Report 2018—2019 19
159.00 2.74 5.00 Tallinn 1114.81 487.00 3.18 11.00
Dublin 2475.41 149.00 2.42 5.00 Riga 1012.02
617.00 2.98 21.58
London 2724.75 180.00 2.18 4.35 Vilnius 975.85
370.00 3.00 16.75
Amsterdam 2461.12 542.00 3.47 11.23 Stockholm 1918.00
508.00 3.38 11.50 Paris 2059.44 277.00 2.37 4.59 Warsaw 1081.58
375.00 1.84 8.30 Barcelona 1620.61 488.00 2.70 13.90 Berlin 1768.19
155.00 1.54 5.85 Cost of living (moderate/low spending)*
Lisbon 1309.90 €800-1200 €2000-2400 407.00 3.31 7.83 194.00 1.09 2.88 €1200-1600 €2400-2800 Tel Aviv 2067.32 Kiev 805.10 €1600-2000
A fixed desk in a coworking space
Cappuccino, regular size
Taxi (5km drive)
* These calculations are based on Numbeo.com algorithms and assumptions about a lifestyle that A fixed desk in a modern, fully-equipped co-working FACT includes: renting a one-bedroom apartment outside the city center, using public transport, occasionally space in Riga will cost you 4x less than in London. For 06 taking a taxi, not spending too much on eating out, the money you’d save, you could buy three return flights leisure, clothing, moderate spending on coffee, alco- from Riga to London (AirBaltic, avg. price €154). holic beverages, travel, and not including child-related expenses. 20 Benchmark
Six startup founders share the actual costs of living in the capital HOW MUCH DOES IT cities of Estonia, Latvia, and ACTUALLY COST TO Lithuania. LIVE IN THE BALTIC STATES?
TALLINN, ESTONIA RIGA, LATVIA
Gabriel Appleton, 27 Eero Veider, 29 Fabrice Amalaman, 31 Co-founder, Vumonic Datalabs Founder, eXpact CEO, PayQin.com
From the USA From Estonia From the Ivory Coast Lives alone in a one-bedroom Lives in a shared apartment in the city Lives alone in a one-bedroom apartment within walking distance center apartment in the city center from the city center Rides a bike to work or takes public Takes a taxi to work Walks to work transport (which is free for locals) Shops at Rimi Shops at Balti Jaam and Selver Shops at a grocery store in the Eats lunch at the office cantine neighborhood Eats out for lunch Brings lunch to work Low spending on entertainment Low spending on entertainment Low spending on entertainment Total monthly costs: Total monthly costs: 1250 Euro Total monthly costs: 1000 Euro 700 Euro What’s surprisingly expensive in Latvia? What’s surprisingly expensive in Estonia? Groceries. Groceries. What’s surprisingly expensive in Estonia? Rent.
BALTIC STARTUP SCENE Report 2018—2019 21
Most startup founders living in the Baltics say they find groceries and rent surprisingly expensive.
Startup Wise Guys publicity photo Startup Wise Guys FACT 07
RIGA, LATVIA VILNIUS, LITHUANIA
Ainars Klavins, 31 Jaanika Jelistratov, 31 Laimonas Noreika, 31 Co-founder & CEO, Overly CEO, VITS CEO & Co-founder, ZITICITY
From Latvia From Estonia From Lithuania Lives with a girlfriend in a 50m2 Lives in a shared apartment outside of Lives with a family (3 people) in a 65m2 apartment in the city center the city center apartment 5km from the city center Walks to work Takes a bus to work (30min drive) Drives to work by car Shops at Rimi Shops at Rimi or Maxima Shops at an online grocery store Barbora.lt Eats out for lunch Eats lunch at the office bistro Brings lunch to work (75% of the time) High spending on entertainment Moderate spending on entertainment Moderate spending on entertainment Total monthly costs: Total monthly costs: Total monthly costs: 1000 Euro 1200 Euro 1300 Euro (per family) What’s surprisingly expensive in Latvia? What’s surprisingly expensive in Lithuania? Groceries. Rent and public transport. What’s surprisingly expensive in Lithuania? Apparel. 22 Benchmark
STARTUP VISAS IN THE BALTICS AND
EUROPE Startup visas offer companies a plethora of benefits. For example, the chance to enter a new market or establish and grow a business in a more startup- friendly environment than where you currently reside. And when it comes to EU member states – it gives direct access to a market of 28 countries and over 500m people. Today, nearly every EU member state has some kind of startup visa policy in place, In 2010, Chile became the which allows qualified entrepreneurs and There’s a significant benefit to countries their employees to receive a temporary res- first country in the world that as well. Startup visas are a way to attract a idence permit in the country. Here are the introduced startup visas. highly qualified workforce, innovation, and best startup visa regimes for non-EU start- Since then, more than 20 other in the long-term – new jobs and more funds ups and how they compare to each other. countries worldwide have in the country’s budget. opened similar programs.
FACT 08
BEST VISA REGIMES FOR NON-EU STARTUPS
Some of the most popular startup visas in the EU, compared side-by-side with startup visa regimes in the Baltic countries. Startup Wise Guys publicity photo Startup Wise Guys
BALTIC STARTUP SCENE Report 2018—2019 23
Estonia Latvia Lithuania France UK* Denmark Italy
Time it takes to register and 1-2 1-2 3 months receive a months 30 days months max 3 weeks 1 month 30 days decision
Online application
Application 100% in English
Innovator: 1,900 DKK Price 60-180 120-240 £966 - £1,277 100 - 400 (254.69 96.46 eur eur eur 368 eur Startup: eur £308 - £493 eur)
Level of innovation will be reviewed
Innovator: 3 years Length of stay 1 year 3 years 1 year 4 years 2 years 1 year Startup: 2 years
Length that can be renewed 183 3 years can apply for 2 years 2 years 2 years days other type of at a time residence permit
Interview required video
Application Home Home Online, then French Online, then Online, then Online, then location embassy or embassy or in Lithuania consulate in in the local at a Danish at the Italian in Estonia in Latvia the home UK visa diplomatic Embassy or country or in application mission Consulate France center abroad
Amount of 1,680 eur 5,160 eur Nothing set, 18,254.60 £945 for 90 137,076 DKK 50,000 eur financial you decide eur consecutive (approx. (can be an “buffer” how much days before 18,374.76 investment) required in you'll need you apply eur) if alone bank account
Prior Innovator: investment Yes (£50,000 necessary 30,000 - for new eur companies, per team member) Startup: No
Sources: Startup Estonia, Startuplatvia.eu, Startup Visa Lithuania, La French Tech, Gov.co.uk, Ny i Denmark, Italiastartupvisa.mise.gov.it * The UK has two types of visas for non-EU founders: the Innovator and Startup Visa. The Innovator visa is for experienced business people, whereas the Startup Visa is for early-stage but high-potential entrepreneurs. BALTIC STARTUP SCENE Report 2018—2019 24 Benchmark
BALTIC STARTUP VISAS IN NUMBERS
The total number of founders that have received a startup visa in the Baltics, 2017-2019
Latvia Lithuania Estonia
43 174 (2019 Q1) 83 70 (2018) 126 (2018) (2019 Q2) (2019 Q2)
ppr appro ppr % a ove % ved % a ove 95 d 35 28 d 54 160 407 since since since March 2017 February 2017 January 2017
11 (2018)
Top 5 most active countries in 2019, based on the number of applications received
1. Russia 1. India 1. Iran 2. Belarussia 2. Iran 2. India 3. China 3. Turkey 3. Egypt 4. Ukraine 4. Russia 4. Pakistan 5. India 5. Ukraine 5. Russia
Source: Startup Estonia, Startup Lithuania, Magnetic Latvia
EXPERT COMMENT 04
Lithuania pays significant attention in order to attract high-skilled talents and innovative non-EU entrepreneurs. Startup Lithuania coordinates the programme called ‘’Startup Visa Lithuania’’ and since the beginning of 2017, an increasing number of startups from non-EU markets have shown interest in Lithuania. In the first half of 2019, ‘’Startup Employee Visa’’ – easier migration procedures for startups to attract foreign employees – was launched. The Lithuanian parliament has also recently passed a legal amendment that will allow foreigners to obtain the status of an e-resident starting in January 2021.
Roberta Rudokiene Head of Startup Lithuania
BALTIC STARTUP SCENE Report 2018—2019 25
INPUT FROM STARTUPS
Edilson Osorio Junior CEO, OriginalMy Blockchain Nationality: Brazilian Holder of: Estonian startup visa Ivan Ladan Cihat Kahraman Co-founder, Marine Digital System Co Founder, VSight Nationality: Russian Nationality: Turkish How long did it take to get the Holder of: Latvian startup visa Holder of: Lithuanian startup visa visa? Normally the process takes 2 months, but in my case, it took 3 – that’s because I applied just before Christmas. How long did it take to get the visa? How long did it take to get the What was the hardest part of the process? We were well-prepared before applying, so visa? the whole process took approximately 2 Approximately 55 days. The hardest part was waiting for my TRP months. (temporary residence permit) card to ar- What was the hardest part of rive. My tourist visa was ending, but I had to What was the hardest part of the the process? travel outside of Estonia. Even though I had process? a letter that stated I was granted the TRP, I Getting an appointment with the Mi- still had trouble on the border when return- When I was applying, OCMA (Office of Citi- gration Department. It took one month ing to Estonia. zenship and Migration Affairs) was probably for the first stage (visa application) and not so experienced with this type of visa. one month for the second stage (get- How does the visa function? Employees were a bit nervous because they ting the accommodation agreement The Estonian TRP allows me to live and didn’t fully understand the procedure. and receiving health insurance). freely travel around Europe for my busi- How does the visa function? How does the visa function? ness. I can also use public transportation for free. What it doesn’t allow – to use entry The Latvian startup visa allows you to live It allows non-EU residents to enter and points for ‘’EU residents’’ in some airports. and work in Latvia, as well as access other stay in the Schengen zone for 1 year. As I’m usually put in the general queue, which European markets. a non-EU citizen, it is very practical. is always long. Startup Wise Guys publicity photo Startup Wise Guys ECOSYSTEM
BALTIC STARTUP SCENE Report 2018—2019 27
BALTIC STARTUP SCENE Report 2018—2019 28 Ecosystem
JANUARY 2020 MARCH 2020 sTARTUp Day North Star AI TECH Tartu, Estonia. 29-31 January Tallinn, Estonia. First half of March The biggest early-stage business festival in the An applied machine learning & data science Baltics bringing together startups, investors, conference for developers. The topics range executives, world-class experts, and media. The from data engineering to meta-learning with EVENTS event has grown organically out of the Tartu applications in speech recognition, text pro- startup and student ecosystem. Alongside loads cessing, healthcare, transportation, deliveries, of hands-on seminars, there are world-class music, movies, etc. speakers and a pitching stage where young Attendance: 630+ participants 33% interna- IN THE talents unveil their big ideas. tional) Attendance: 4000 participants Best for: developers, CTOs, AI experts, data + Best for: entrepreneurs, business executives, scientists, analysts, and startup leaders BALTICS startups, investors APRIL 2020 The Baltics are booming with FEBRUARY 2020 festivals, events, conferences, GameDevDays TechChill and forums where people Tallinn, Estonia. 11-12 April from startups, tech, and Riga, Latvia. 20-21 February An international cross-platform game develop- businesses can meet and The largest Latvian startup and technology ment and marketing conference. conference and networking event. Each year, make great ideas happen. the festival handpicks leading visionaries, UX Tartu What’s more – they’re all game-changers, and tech-heads to deliver within less than a day’s travel. you the new and the unexpected. For startups, Tartu, Estonia. Middle of April TechChill is the place to meet the most relevant As a bonus we have also A tech event for UX designers, developers, investors, learn about the industry trends, and product owners. included some of the hottest gain visibility within and beyond the Baltics. events in our neighbouring Attendance: 2000+ participants (71% local, Deep Tech Atelier countries. Explore our event 29% international) Riga, Latvia. 3-4 April calendar and plan your agenda Best for: the Baltic startup community – start- An entrepreneurship forum dedicated to deep- accordingly! ups, corporations, investors, tech enthusiasts tech startup creation and development. MAY 2020 Latitude59 Tallinn, Estonia. 28-29 May The flagship startup and tech event of e-Esto- nia – the world’s first digital society connecting investors with startups. A cosy, yet influential startup festival that focuses on the future of tech, education, humanity, ethics, government, living environment etc. Attendance: 2500+ participants (33% interna- tional) Best for: startups, entrepreneurs, investors, digital governance enthusiasts Login Vilnius, Lithuania. 28-29 May A technology and innovation festival and conference focusing on creativity. One of the core activities of the festival is the closing event including the Internet Awards ceremony, celebrating the greatest internet projects of the previous year. Attendance: 6000 participants Best for: tech-savvy innovators, digital enthu-
siasts, trend setters, startups, entrepreneurs, weekend same during the as they’re taking place or Login with Emerge, Latitude59 Combine BALTIC STARTUP SCENE Report 2018—2019 corporates
Latitude59 publicity photo 29 It will take you 7 hours and 40 minutes – or 604 km – to get from Vilnius to Riga to Tallinn by car. If you’re up for a challenge, this SEPTEMBER 2020 makes it possible to visit an event Slush + in each of the Baltic capitals in just Baltic Honeybadger one day! Start with Login (Vilnius), Riga, Latvia. Middle of September Helsinki, Finland. 19-20 November drive over to Riga DevDays Major Bitcoin conference. The focal point for European and Asian (Riga), and finish your journey in startups and tech talent to meet with top-tier Latitude59 (Tallinn). Tech Day international influencers, investors, and me- Tallinn, Estonia. Middle of September dia. Truly a one-of-a-kind event that allows startups to connect with investors and the Estonia’s biggest technology conference focus- key players of the fastest growing companies FACT 09 ing on the latest technology news. in the world. TechBBQ + Attendance: 25 000 participants from 130+ countries (including 4000 startups and 2000 Copenhagen, Denmark. 17-18 September investors) An international tech-startup summit by and for Best for: startups, investors, people & media the startup community. working in tech Emerge + Oslo Innovation Week + Tallinn Startup Week Minsk, Belarus. 29-30 May Oslo, Norway. 21-25 September Tallinn, Estonia. Middle of November The hotbed for deep tech, founders, community An innovation conference with a series of pitch- Tallinn Startup Week is a five-day celebration leaders, bigger companies, and investors from ing contests, hackathons, workshops, seminars of the entrepreneurial mindset and startup across the New East (including Eastern Europe, and company crawls. community with 60+ events across Estonia. the Balkans and Central Asia). GeekOut Attendance: 1500 participants from 22 coun- 5G Techritory tries Tallinn, Estonia. End of September Riga, Latvia. End of November Best for: startups, entrepreneurs, investors A technology conference and show for develop- The Baltic Sea region 5G ecosystem forum. ers focusing on newest tools, solution architec- Riga Dev Days ture, programming. Fall madness starts with iNovuss, continues with Tech Day, and ends with TechBBQ or Oslo Innovation Week or Oslo Innovation with TechBBQ ends and Day, with Tech continues starts with iNovuss, madness Fall Riga, Latvia. 26-28 May FinTech Inn A tech conference and annual meeting point for OCTOBER 2020 Vilnius, Lithuania. End of November developers in the Baltics. A financial technologies conference. Riga COMM Startup Fair Riga, Latvia. First half of October Vilnius, Lithuania. 21-22 May A business technology fair & conference with DECEMBER 2019 The main international startup ecosystem event various thematic tracks, for example, fintech Robotex International in Lithuania. conference, digital marketing stages etc. Arctic15 + Attendance: 4800 participants (90% locals, but Tallinn, Estonia, End of November, begin- the event is foreigner-friendly) ning of December Helsinki, Finland. 26-27 May Best for: business tech enthusiasts, corpo- The biggest robotics festival on the planet. The most effective matchmaking event and rates, SMEs startup-investor conference in North Europe. Devternity The goal of the event is to enable quality net- working, foster meaningful relationships, and NOVEMBER 2020 Riga, Latvia. Beginning of December Devternity is one of the top tech, IT, and soft- real returns on investment. Digital Freedom Festival Attendance: 800+ participants from 50 coun- ware development conferences in Europe. tries Riga, Latvia. Middle of November The second day of the conference usually hosts a series of practical workshops. Best for: startups, investors, entrepreneurs A boutique, yet influential technology, start- up, and lifestyle festival discussing the latest Attendance: 800 people trends in digital tech. In 2019, Digital Freedom Best for: developers of all kinds – coders, AUGUST 2020 Festival focused on sustainability, impact, software architects, project executives and the humanity aspect of tech to discuss iNovuss and answer what is our role and challenges in the digital world. Riga, Latvia. 28-30 August Attendance: 1600 participants from 30+ An innovation, technology, and music festival countries that takes place outdoors. The event is mostly organised around Latvian speakers and experts. Best for: digital era and tech enthusiasts, policymakers, investors, startups, consumers Attendance: several thousand visitors Best for: Latvian companies, startups, tech BALTIC STARTUP SCENE enthusiasts Report 2018—2019 30 Ecosystem
WHY IS IT IMPORTANT TO ORGANISE INTERNATIONAL-SCALE EXPERT TECH CONFERENCES IN COMMENT 05 THE BALTICS? I consider tech festivals as meeting platforms of great minds; and there is no doubt that where great people meet, magic happens. One cannot boost innovations in isolation, and the Baltic countries have a lot of things to offer – great and ambitious talent, a supportive ecosystem, great infrastructure – we have it all! Tech events help us to make meaningful connections and build mutual trust, which is the basis for successful growth in this very competitive innovation environment.
Dagnija Lejina Co-Founder and CEO, Digital Freedom Festival
EXPERT COMMENT 06
We’ve seen a year on year increase in international visitors at Latitude59. So much so that in 2019, we had attendees from 58 different countries, including investors from 30 different countries. There’s definitely a growing interest in the region, so it’s important to keep organizing such top quality events to showcase the vibrant startup ecosystems of all three Baltic States.
Maarja Pehk CEO, Latitude59
EXPERT COMMENT 07
Startup Lithuania organizes the main startup event in Lithuania, Startup Fair, as we believe that international events are essential for FACT a successful startup ecosystem. Such events foster knowledge and 10 experience-sharing, as well as create great opportunities for startups to meet foreign investors and partners. We think it’s a long-term The first edition of TechChill investment, which brings economic and social benefits. was actually called TechCrunch Baltics. It was organized in partnership Roberta Rudokiene with TechCrunch as a launch Head of Startup Lithuania event of the first co-working space for startups in Riga – TechHub Riga, in 2012.
BALTIC STARTUP SCENE Report 2018—2019 31
STARTUP FUNDING IN THE BALTICS
Baltic startups have access to several funding options – from local and foreign VC funds to business angels and accelerators.
According to Vilija Sveikauskiene, The lack of funding can hinder the potential FACT 11 Chief Project Manager of INVEGA creation of new startups and the develop- ment of the existing ones. If the founders (Lithuania), actively supporting manage to establish a startup, without fur- Local investors – VC startups and providing them ther funding these young innovative com- funds, business angels, with opportunities to attract panies can succumb, perish, or move out and startup accelerators – investments is extremely of the country, chasing finance and a more accounted for 18.5% of the favorable environment for its activity. As a important for the development of total startup investment in result, the country can lose its ‘’brains’’ and the local ecosystem. enterprises that are developing innovative the Baltics in 2018/2019. products,’’ she warns.
TechChill publicity photo TechChill BALTIC STARTUP SCENE Report 2018—2019 32 Ecosystem
VC FUNDS Contrarian Ventures MOST ACTIVE LOCAL Focus: early stage emerging technologies Portfolio: 15 VC FUNDS LATVIA Startups from the portfolio: Last Mile (Lithuania), AERO Diagnostika (Lithuania), Estonia, Latvia, and Lithuania- Imprimatur Capital HEPTA (Estonia) based VC funds with at least 3 Focus: pre-series A stage B2B Software & Investments made 2018 – 2019 (Q3): 6 investments in 2018 and 2019 Data, Digital Health & Lifestyle, Learning (Q3), and funds that have a & Training, and Robotics/Automation Open Circle Capital startups noteworthy historical activity (15+ Focus: early stage tech Portfolio: 35 investments) in the Baltic region. Portfolio: 7 Startups from the portfolio: Edurio (Latvia), Playgineering (Latvia) Startups from the portfolio: Whatagraph (Lithuania), Teamgate (Lithuania) Investments made 2018 – 2019 (Q3): 1 ESTONIA Investments made 2018 – 2019 (Q3): 7 Tera Ventures Livonia Partners Practica Capital Focus: seed stage digital startups creating Focus: successful, medium-sized network effects, applying machine learning companies, market leaders in the region Focus: seed, early and growth stage and other enabling technologies to and beyond ventures, cross-industrial and tech-driven businesses business models Portfolio: 15 Portfolio: 40+ Portfolio: 20 Startups from the portfolio: Finestra Startups from the portfolio: Monese (Estonia), Scoro (Estonia) Startups from the portfolio: TransferGo (Lithuania), ZitiCity (Lithuania), (Estonia), Scoro (Estonia) Investments made 2018 – 2019 (Q3): 2 Sonarworks (Latvia) Investments made 2018 – 2019 (Q3): 5 ZGI Capital Investments made 2018 – 2019 (Q3): 6 Karma Ventures Focus: companies with proven business Focus: Information and Communications models and firmly established home PAN-BALTIC Technology startups with initial markets and now entering new export Change Ventures commercial traction markets or looking to increase capacity, Portfolio: 14 develop new business directions, Focus: pre-seed or seed stage technology startups Startups from the portfolio: Realeyes improve the profitability, or automate (Estonia), Sonarworks (Latvia) manufacturing Portfolio: 9 Investments made 2018 – 2019 (Q3): 4 Portfolio: 20 Startups from the portfolio: Nordigen Startups from the portfolio: Hansamatrix (Latvia), Giraffe360 (Latvia) United Angels VC (Latvia), Mobilly (Latvia) Investments made 2018 – 2019 (Q3): 3 Investments made 2018 – 2019 (Q3): 2 Focus: early stage B2B, SaaS, marketplace startups BaltCap Portfolio: 30 Focus: fast growing companies with Startups from the portfolio: Bolt (Estonia), LITHUANIA proven and profitable business models; in Monese (Estonia), Funderful (Latvia) cooperation with JBIC IG Partners – early Investments made 2018 – 2019 (Q3): 12 Iron Wolf Capital stage startups in ICT/Deep Tech sectors Focus: seed to early growth stage startups (incl. Autonomous Mobility, Digital Health, trind.vc with an innovative product offering, AR/VR/MR, AI, Robotics, IoT) Focus: early stage B2B, SaaS, marketplace innovative technology, or unique business Portfolio: 100+ startups model. Startups from the portfolio: EKT Portfolio: 13 Portfolio: 3 (Estonia), Fitek (Estonia), Coffee Address (Lithuania) Startups from the portfolio: RangeForce Startups from the portfolio: Sprana (Estonia), Speakly (Estonia), Vumonic (Lithuania), Millo (Lithuania), Monimoto Investments made 2018 – 2019 (Q3): 7 (Estiona-India) (Lithuania) Investments made 2018 – 2019 (Q3): 13 Investments made 2018 – 2019 (Q3): 3 Source: crowdsourced data (Estonia, Latvia, Lithuania), websites of VC funds, Dealroom.co
BALTIC STARTUP SCENE Report 2018—2019 EXPERT COMMENT 0833
Polish venture capital funds FOREIGN VC FUNDS INVESTING are increasing their interest in IN BALTIC STARTUPS startups from the Baltics. This interest is mostly driven by the *Foreign VC funds that have made region’s success stories like at least two investments in Baltic Skype, Transferwise, Bolt, BitFury startups in 2018 and 2019 (Q3). or Vinted (among others), and also the global mindset of the founders that think of going big PAN-EUROPEAN SWEDEN from day one due to the small market size. In comparison, a lot Draper Esprit Creandum of Polish startups start in the local Focus: Consumer Tech, Enterprise Tech, Focus: Tech startups (Enterprise market with intention to scale Hardware & Electronics, Digital Health & Software, Media, Fintech) internationally in a matter of few Wellness Investments in Baltic startups years. Investments in Baltic startups (2018/2019): 2 (2018/2019): 2 Recent deal: Bolt (Estonia) – €60M (+ 10 Pawel Maj Recent deal: Realeyes (Estonia) – €11M (+ 4 other VCs and business angels) Investment Director, bValue other VCs) US POLAND The Entrepreneurs’ Fund Black Pearls VC Focus: Cloud-based B2B Software, FACT Focus: Deep Tech & Enterprise Software Cognitive Computing 12 Investments in Baltic startups Investments in Baltic startups (2018/2019): 3 (2018/2019): 2 Some of the biggest names Recent deal: Teamscope (Estonia) – €550k Recent deal: Realeyes (Estonia) – €11M (+ 4 that have invested in Baltic (w/ Jaan Tallinn) other VCs) startups in 2018/2019 are Morpheus Ventures Ashton Kutcher, Taizo Son, and FINLAND Gokul Rajaram. Focus: Enterprise Software, Robotics, Inventure Fintech Focus: Tech startups (Enterprise Investments in Baltic startups Software, Health Tech) (2018/2019): 2 UK Investments in Baltic startups Recent deal: Starship Technologies (2018/2019): 2 (Estonia) – €36M (+ 4 other VCs) Passion Capital Recent deal: Nordigen (Latvia) – €734k (w/ Focus: Tech startups (Fintech, Enterprise Seedcamp) Insight Venture Partners Software) Icebreaker VC Focus: Enterprise Software, Fintech, Investments in Baltic startups Marketing, Security, Media, Education (2018/2019): 2 Focus: Tech startups (Enterprise Investments in Baltic startups Recent deal: Lift99 (Estonia) – €2M (+ 7 Software) (2018/2019): 3 other VCs and business angels) Investments in Baltic startups Recent deal: Vinted (Lithuania) – €50M (w/ 3 (2018/2019): Sprints Capital & Hubert Burda Media) Recent deal: Klaus (Estonia) – €1.68M (w/ AUSTRIA Creandum and business angels) TURKEY Speedinvest Focus: Network Effect, Fintech, Industrial Revo Capital tech startups Focus: B2B Cloud, Neo-Commerce & Investments in Baltic startups Enablers, and IoT startups (2018/2019): 2 Investments in Baltic startups Recent deal: Investly (Estonia) – €564k (+ 4 (2018/2019): 2 other VCs) Recent deal: Sonarworks (Latvia) – €5M (+ Source: crowdsourced data (Estonia, Latvia, 4 other VCs) Lithuania), VC fund websites, Dealroom.co
BALTIC STARTUP SCENE Report 2018—2019 34 Ecosystem
BUSINESS ANGELS
MEMBERS OF BUSINESS ANGEL ASSOCIATIONS With 148 members (as of Q3 2019), BUSINESS ANGEL LATBAN Estonia has the most active INVESTMENTS IN 2018 LatBAN aims to extend and develop the Business Angel Network within network of investors in Latvia to support the Baltic states. They’ve also ESTBAN new and perspective projects. For startups initiated the Nordic Angel Program and investors, the association organises EstBAN helps startups by providing - a training and investment Investment Sessions – events during which capital, time, knowledge and network. investors and new entrepreneurs meet program for angel investors in They’re looking for teams with innovative with each other. Follow LatBAN’s event cooperation with Danish, Finnish business models or solutions for a major calendar on their website. and Norweigan BAN’s. Startups problem. To apply, the startup should have at least a team, product/MVP, and strong have the possibility to receive market validation with relevant traction. Total amount invested in 2018: €2M investment from these syndicates. The association organizes different Latvia’s LatBAN has 50 active events for its members, including training, Portfolio size in 2018: 21 members, while Lithuania’s LitBan networking, and pitching events – all Average investment per project: €86K events are marked on their online calendar. has 64, even though it only started Recent noteworthy deals: VividTech, to operate in 2018. Prior to that, ZitiCity Business Angels in Lithuania Total amount invested in 2018: €7.1M acted individually or were united Portfolio size in 2018: 99 under private initiatives. Average investment per project: LITBAN 80K-200K LitBAN fosters business angel activity Recent noteworthy deals: FoodDocs, through communication, events, Fractory, GuestJoy, Zelos, VideoCV networking, and syndication of deals – both locally and across the Nordics. For startups, LitBAN organises monthly pitch events, which is a chance for them to present their ideas to angel investors. Apply via their website.
Total amount invested in 2018: €1.1M FACT 13 Portfolio size in 2018: 39 Average investment per project: 50K-100K Once established, Recent noteworthy deals: Interactio, LitBAN quickly gained Attention Insight great interest from local startups – in its first year, the association received over 140 applications for investments.
Source: EstBAN, LatBAN, LitBAN BALTIC STARTUP SCENE Report 2018—2019 Startup Wise Guys has 35 been named one of the most international startup accelerators in Europe by the Startup Heatmap project. There are founders STARTUP from more than 40 countries in their portfolio. ACCELERATORS FACT 14
Commercialization Reactor 2009 Superangel 2018 Deep tech, science commercialization Software or hardware with strong software component
21 10 (accelerated) + 19 (received investment) Hugo.legal, Montonio, Lumebot Squad Robotics, Sizzapp, Verita Cell, InLable TALLINN
Buildit Latvia 2018 Startup Wise Guys 2012 Hardware & IoT B2B SaaS, fintech, cybersecurity 11 investments 145 (received investments) + (additional 2 in pre-seed and 1 in seed) 72 (online pre-accelerator graduates) asya, Lastbit, The Littery, Winmill VitalFields, StepShot, RebelRoam, SkySelect
RIGA Overkill Ventures 2018 Baltic Sandbox 2018 B2B, smart workplace SaaS, fintech
12 AxDraft, FabControl KAUNAS 15 Searadar, Amberlo, ViaCorex
VILNIUS Kaunas Startups 2018 70ventures 2019 B2B Healthcare, education, B2B SaaS 6 accelerated startups, 25 Dear Deer Eyewear 7 investments Whatagraph
Portfolio size Top portfolio companies Startup Wise Guys, Superangel, Commercialization Reactor, Buildit Latvia, Overkill Ventures, Baltic Sandbox, 70ventures, Kaunas Startups, crowdsourced data
There are several startup The majority of accelerator programs have can also apply for the Latvian, Lithuanian, accelerators that are active in received financial support from the Euro- or Estonian startup visa – it allows them to pean Regional Development Fund. Baltic continue the development of their products the Baltics. Most accelerators run Sandbox is the only accelerator that runs in the Baltics after the accelerator program locally in their home countries, entirely on private funding, whereas Start- is finished. but there are exceptions, such as up Wise Guys has private funding in two out Startup Wise Guys, who have been of three countries. pan-baltic as of 2019, when they Baltic accelerators are also available to ran their first batch in Lithuania. foreign and non-EU founders. Most pro- grams require company registration in the Baltics and, if founders are interested, they
BALTIC STARTUP SCENE Report 2018—2019 36 Ecosystem
ACCELERATING AT HOME VS. ABROAD Five startup founders share their experience and analyze the pros Moving out of our hometown and cons of accelerating in their was a lesson in ‘’home home country vs. accelerating Sigvards Krongorns economics’’, an important test abroad. Co-founder of CastPrint of the team’s cohesion, and an opportunity to build a second From: Riga, Latvia regional network of contacts. Accelerator: Startup Wise Guys, Batch All this has come in handy 9 (Riga, Latvia) since then.
What are the pros of participating in an accelerator in your own hometown? ‘’Home-field advantage’’, meaning – you work in a well-known environment, and that makes life slightly easier. Another import- ant advantage is that you have your sup- port system (outside the startup ‘’bubble’’) close by, which significantly helps to push through the tough moments. Karl Erik Kalmus What are the cons of participat- COO at SmartVent ing in an accelerator in your own From: Tartu, Estonia hometown? Accelerator: Startup Wise Guys, Batch The main challenge to a home-town ac- 10 (Riga, Latvia) celerator is that being close to family and friends can sometimes be distracting and steal some of your attention from the start- up. What are the pros of participating in an accelerator abroad? A completely new network – that’s if you ac- If you already know where tively attend local events. Also, if you build a globally scalable business, accelerating your first customers are, go away from home will teach you to live any- for an accelerator abroad – where, commute to anywhere, and make they’re great ‘’door openers’’ contacts with anyone. And you will need to new markets, especially that in the future. if they have their own local networks. However, if you’re still not sure who your What are the cons of participating customer is, apply for a local in an accelerator abroad? accelerator. There’s a close Your team’s basic expenses, such as ac- startup community in the commodation and transport, increases Baltics, which is a great quite significantly. In our case, approxi- environment for startups to mately 25% of accelerator funding went define their customers, get towards these additional costs. first pilots, early traction, and then go abroad with a BALTIC STARTUP SCENE Report 2018—2019 defined concept. 37
The best place to accelerate is where your clients are. If your clients are based in Germany, there is no point to join an accelerator in the USA. And the second important question is whether there’s money because sooner or later you’ll need funds to grow your Adomas Baltagalvis business. Co-Founder & CMO at EddyTravels.com From: Vilnius, Lithuania Think big and go where your customers are. Accelerator: Techstars Toronto (Toronto, Canada)
What are the main benefits of accelerating in Canada? If your target market is English-speaking countries, Canada is a good entry-point. Matiss Brunavs It’s also a great place to develop AI and machine learning technologies – Canada Founder & CEO at Squad Robotics is one of the world’s leaders in these tech- From: Riga, Latvia nologies. And atop of that, the local startup ecosystem in Toronto is superb – with a ton Accelerator: Startup Wise Guys of talent, dozens of events happening every James Berdigans (Tallinn, Estonia) & Startupbootcamp month, and many venture capital funds op- IOT (London, UK) erating there. CEO & Founder, Printify From: Riga, Latvia What are the challenges when Accelerator: 500startups, USA What are the main benefits and accelerating in Canada? challenges of accelerating in the Baltics? Moving to a completely new city or country will take some time to adjust. The overall What are the main benefits of The Baltics is an excellent sandbox for business culture can also be very different accelerating in the US? startups to try things out. Local accelera- from what you are used to. For these and tors are perfect for very early-stage start- other reasons, going through an accelera- The US is a huge market with better-devel- ups, as well as founders with little or no tor oversees can be quite an overwhelming oped technologies, when compared to the entrepreneurial experience – this region is experience. EU. A local accelerator is a step towards more forgiving to mistakes and failures, so entering that market and reaching over 300 it’s perfect for experiments. On the other million people who speak the same lan- hand, if you start out in the Baltics, scaling guage. There is also the same legislation the business may take more time due to the across all states (unlike in the EU), which small market size. makes it easy to do business there. The program allowed us to refine our operations and What are the challenges when What are the main benefits and crystalize our activities. We accelerating overseas? challenges of accelerating in a met with over 150 founders, large startup hub like London? partners, and investors during When you leave home to start accelerating overseas, you don’t have a network of con- When compared to the Baltics, people in the program and received tacts as it is in your home country. You are London have a completely different mind- invaluable feedback and on your own. On top of that, you don’t know set. The market is extremely competitive, advice from them. Techstars the local culture, policies, and customer so everyone’s ready to do whatever it takes has an incredible global expectations – you have to start from zero. to get in front of customers, partners, and network that we can now investors. Accelerating in a large startup utilize for developing and hub will definitely push the boundaries of your comfort zone and broaden your per- scaling Eddy Travels. spective, which helps you further grow the BALTIC STARTUP SCENE Report 2018—2019 business. 38 Ecosystem
2018 2019 >1% increase 0-1% increase BALTIC decrease 20.9 WOMEN 20.8 Sweden 17.6 16.2 +0.1% 21.1 IN TECH 19.0 UK Ireland +1.4% 16.6 +2.1% 15.6 In 2019, 17.2% of information and 14.8 14.5 20.3 16.6 The Netherlands 19.1 communication technologies (ICT) 16.6 specialists in Europe were women. +1% Poland When compared to 2018, that’s Germany +0.3% Ukraine 18.1 just a 3% increase, which shows 19.6 = +1.2% that to close the tech industry’ s France
gender gap, Europe still has a long 16.1 15.4 +1.5% way to go. 16.1 14.4 Spain Portugal +0.7% Out of the three Baltic states, Lithuania shows the most notable results – over one -1.7% fourth of ITC specialists in Lithuania are women. Estonia and Latvia are also above the EU average. 19.4 24.8 25.7 18.7 21.3 24.8 This year’s data, however, shows that Lat- +0.7% -3.5% +0.9% via has a decrease in women ICT special- Estonia Latvia Lithuania ists since 2018. But Anna Andersone, Board Member of Riga Tech Girls, says that there is no cause for concern: ‘’If we look at the absolute numbers, it’s clear that there are 17.2 more women in IT than ever. Today, there 16.7 are already several companies in Latvia +0.5% with a 50/50 proportion of men and wom- EU average en in IT positions. Women’s interest in IT is growing as well when compared to the past two years.’’
Sources: Europa.eu, Duo.ua
BALTIC STARTUP SCENE Report 2018—2019 Startup Wise Guys publicity photo Startup Wise Guys 39
WOMEN IN TECH ORGANISATIONS IN THE BALTICS On the European map, the Baltic states stand out with rather high representation of women in tech. Here are five organiza- tions from Estonia, Latvia and Lithuania that are actively working on involving women and girls in tech.
Johanna, co-founder of Zelos, Latitude59 publicity photo
ESTONIA LATVIA LITHUANIA
Tech Sisters Riga Tech Girls Vilnius girls code A community organisation with a mission to The first community in Latvia dedicated to edu- A community and a place where IT women of inspire, educate, and encourage women and cating and inspiring women about technology. Vilnius meet and share their stories. girls in technology and IT. Mission: To empower women and girls to be Mission: To unite all women developers in Vilni- Mission: To demystify technology and advance architects of the future. us to inspire, educate, and be more active in the women in IT. Members: 942 creation of the newest technologies. Members: 50+ Activities provided: Free practical workshops, Members: 650+ Activities provided: hands-on workshops in inspirational meet-ups, scholarship programs Activities provided: meetups, workshops, web and software development, robotics and for programming courses, providing #wom- discussions design, networking events for women who enintech speakers for conferences and other work in tech, and workshops for teenage girls events, international collaboration and network- (DigiGirls) to get inspired by tech. ing opportunities.
Future Heroes (ex. Superheroes) Women Go Tech A growth mindset driven leadership and The first mentoring and counseling program in business accelerator for 13-17-year-old girls Lithuania for girls and women seeking a career to unlock their potential and create a positive in the technology sector. impact in the world. Mission: To empower women to seek out pro- Mission: To grow and encourage a new gen- fessional careers within the tech sector. FACT eration of confident and committed women 15 Members: 240 leaders. Activities provided: Individual mentoring Members: >170 sessions, tech workshops and presentations, Activities provided: leadership and business Women are driving the tech events, conferences, tours and visits to tech accelerator programs for teenage girls, as well ecosystem in the Baltics companies, community building events and as diverse masterclasses on different topics – the majority of the local activities. (from mindfulness to financial literacy and accelerators, biggest tech storytelling) for youth and adults alike. conferences, and other tech events in the region are led by women. Additionally, Baltic Sandbox, the Vilnius-based accelerator, launched the first ever Women in Tech Batch for female founders and co- founders in fall 2019.
BALTIC STARTUP SCENE Report 2018—2019 40 Ecosystem
WHY DOES GENDER EXPERT COMMENT 09 BALANCE IN TECH MATTER? It has been proven that diversity in leadership, governing boards, development of products and services makes firms more productive. Neurology demonstrates that working in a team of like-minded people can lull the brain into the state of complacency that will diminish performance and discourage innovation. Therefore, the gender balance in teams needs to be fostered to increase the competitiveness, productivity, and chances of innovations and flow.
Solvita Kostjukova Co-founder & CEO, ALINA LLC
EXPERT COMMENT 10
Aayush Mahadik once said that ‘’you cannot solve a problem with the mind that created it”. And this is certainly true in the world of tech. As the use of tech grows – and with it, the problems we wish to solve – so does the need for diverse and new thinking. To meet this demand, there needs to be a growing diversity in the workforce enabling this growth. The expanse of tech knows no bounds, and so those working in tech need to reflect this with a diverse and rich mix of individuals, spanning gender, background, education, and society. The wider the use of tech grows the wider the industry will need to throw the net for individuals to meet those expanding horizons.
Clare Lain Former Cyber Strategist, NATO Cyber Defence Centre of Excellence EXPERT COMMENT 11
Gender diversity in tech matters for several reasons. First of all, it makes the team more creative – different standpoints and experiences boost innovation and productivity, as well as lead to better decision FACT 16 making. Second, employers that are open to diverse candidates, have more chances to hire the best talents in the market. And finally, gender According to Crunchbase, diversity allows businesses to reflect customer needs much better – over $20 billion globally has when you get different perspectives, you can build a product that both been invested in female- men and women will use. founded and co-founded startups so far in 2019. Out of those $20 billion, Renata Sumskaite approximately $5 billion has been invested in female-only Mentor, Women go Tech founded startups.
BALTIC STARTUP SCENE Report 2018—2019 41
CORPORATE INNOVATION IN THE BALTICS
The average company lifespan of companies on the S&P Index is down to less than 16 years from nearly 60 years. The corporate answer to this is a general push towards innovation. A lot of corporate innovation vehicles are used from Internal innovation departments and Intrapreneur programs to Open Innovation and Corporate accelerators. Looking at the Baltics, there are only a few examples where innovation is run external- ly, i.e., as a co-creation activity with start- ups, corporate venture fund, or external corporate accelerator program. Most typ- ical cases involve a dedicated Innovation manager position internally, Intrapreneur program and internal hackathon or incuba- tor setup.
EXPERT CORPORATE-STARTUP COMMENT 12 COLLABORATION Nurturing innovation internally can be rather risky. In 2017 In terms of innovative environments, ac- alone - 20 corporate innovation labs were launched per week cording to the European Commission In- globally, and 90% of those failed to produce any results. 80% of novation Scoreboard, since 2018, Estonia innovations are created by someone outside the field where the has graduated into the category of “strong innovator”, while Latvia and Lithuania re- innovation occurred. This reaffirms the practice of using external main in the “Moderate Innovator” category, expertise, especially from outside the industry, to drive disruptive though all 3 Baltic countries were named as innovation. demonstrating the most rapid growth rate, This practice can be seen by the growing ties between along with the UK, Malta, Greece, and the Netherlands. accelerators and corporations. In 2017 CB Insights reported 67.2% of accelerator revenue coming from corporate collaborations. The need for this collaboration is quite clear. Most corporate innovation processes excel at idea generation, whereas accelerators – in execution.
Farid Singh Startup Wise Guys
BALTIC STARTUP SCENE Report 2018—2019 42 Ecosystem
EXAMPLES OF BANKING TELECOMMUNICATIONS SUCCESSFUL The Fintech movement and the advent of The telco industry has the perfect pre- challenger banks has made it evident that condition for innovation, having the CORPORATE for traditional banks to survive, they need infrastructure and funds, side-by-side with INNOVATION CASES to innovate to suit a changing audience’s a demanding audience, be it the tech-savvy needs. The good news is they have quite young generation or elderly that need to The general impression about the cor- a lot of resources at hand to do that. The tap into using modern technologies. Baltic porate innovation scene in the Baltics is PSD2 directive, anti-money-laundering telcos have also been in the forefront that it is driven by international corpora- (AML) allegations and client authentication of running international accelerator tions with their HQ elsewhere and clearly challenges are additional factors why programs and breeding in-house startups structured innovation programs. This is lately banks seem to treat Fintech startups or co-creating with founders. mostly related to IT giants like Google, Mi- less as competitors and more as potential crosoft, Accenture, also Swedish banks - partners and service providers in areas ELISA ESTONIA Swedbank, SEB. In terms of local compa- where startups tend to move faster. nies, most successful startup-corporate Most banks in the region have set up an A branch of the Finnish telecommunications company, Elisa Estonia is known is known for collaboration cases can be seen in the Open Banking platform and are testing institutionalized startup collaboration. They’ve telco sector, although there also seems various formats of collaboration. Here had successful projects together with startups to be some stirring and movement in the are some examples of bank and startup such as FlyDog, SuperHands, MindTitan, and energy, forestry and other sectors, where collaboration in the Baltics. Hoopy. companies are often fully or partly owned by the government. CITADELE + KLIX.APP LATVIAN MOBILE This prevalence of a few industries that Citadele bank is one of the rare cases of TELEPHONE (LMT) are taking the lead in corporate-startup intrapreneurship where a corporation has innovation demonstrates the extent of created a startup under its wing. Klix.app LMT has dedicated a branch of R&D to how early-stage this type of cooperation is a universal login system for e-commerce innovative projects and startup collaboration. is in the Baltics. It is also clear that those checkouts. It is intended to cut 20+ checkout Most recently, they’ve collaborated with the sectors that are leading the development steps to just a few, to help online retailers sell Zinoo team to test high-altitude internet with a tend to be those with money to spare. more. The startup is fully funded by the bank, rocket, as well as have previously worked with which is also the sole shareholder. There is a Aerones, the drone startup that was a finalist at team of 9 people working on this project and the Slush pitching competition in 2018. they have established their first customers in the Latvian market. TELIA ESTONIA Telia Estonia has a dedicated startup program SWEDBANK + STARTUP called VUNK. They have launched 87 projects WISE GUYS to date through the program. Previsouly the program included a startup accelerator, which Swedbank, the largest bank in the Baltics, has currently works on a case-by-case basis. established collaboration with an external accelerator to test their Open Banking platform, look for business development possibilities and MOQ change company culture. Fintech programs An application for shopping by phone developed are run by the Startup Wise Guys accelerator by Lithuania’s three largest mobile network and after 2 successful batches in Latvia, the operators – Bitė Lietuva, Tele2 and Telia Lietuva. concept has expanded to Lithuania, where the They already have over 53 000 active users on third Wise Guys Fintech program is in action the app. Mobile operators are shareholders of in collaboration with Swedbank and other the company and have funded its development. corporate partners.
SEB VENTURE CAPITAL The investment program for Baltic Fintechs was launched in 2018 with the intention to invest into 10 - 20 startups from the region. This financing is available both to startups working in the financial services area as well as companies that have ideas for potential applications in the financial industry, for instance, through automation, machine learning, or artificial intelligence solutions. Currently, no investment in Baltic startups has been made, however, the bank is in active negotiations and on the lookout for startups.
BALTIC STARTUP SCENE Report 2018—2019 43 ENERGY Energy is facing a revolution as a sector globally due to limited resources. It is expected to garner an increasing amount of collaboration between startups and corporations to develop new business models and infrastructure. Until recently, the energy sector in the Baltics has been rather conservative, as the larger companies are fully or partly owned, and functioning in a closed market. In recent years, however, there seems to be movement towards innovation and energy companies are looking into various collaboration opportunities. IGNITIS GROUP The Lithuanian energy company has set up a Smart Energy Fund managed by Contrarian Ventures. This year together with Honda they have invested in smart battery company Moixa. They also run an accelerator program called Accelerator One, and organize hackathons twice per year. The company is open to developing proof of concepts with startups and to provide access to their infrastructure.
LATVENERGO The Latvian energy provider has teamed up with smart home solution Istabai to sell white-labeled smart home solutions to their clients.
ENEFIT In the Baltics, Enefit is organizing the Enefit Idea Hub, which is a pitching competition for startups in smart mobility, smart services and smart city verticals, complete with a mentorship program. The winner receives 30,000 EUR for developing their idea. Marite Aleksandra-Silava, Fintech Community Manager at Swedbank at TechChill
EXPERT COMMENT 13
Innovation cannot happen in a element. Of course, the telco industry research and that gives amazing silo. It takes a diverse ecosystem has been one of the clear early adopters opportunities even for large IT and “bridging” between different in terms of corporate innovation, and companies like us to test things. mindsets, experiences and it is also very understandable why a For example, we have been working infrastructures. I like the startup would go to them – they have with the University of Latvia on a example in Germany, where a a user-base, big data, and extensive project called dBaby - developing telco company, municipality, technology infrastructure. But this shift a robot that is able to navigate the and an air carrier are all looking can be seen across many industries. environment and locate and pick up into ways to develop a drone defined objects, as well as software In terms of the Baltics, I’m especially management system for the to control movements and sense happy to see the academic sector future. They wouldn’t be able to devices. become increasingly involved. There’s properly innovate on their own, a mindset change towards applied as each would lack an important Kristaps Banga
AccentureBALTIC STARTUP Latvia SCENE Innovation Report 2018—2019 Lead STARTUPS TO WATCH
BALTIC STARTUP SCENE Report 2018—2019 45
Rather than bombard you with the typical success stories and unicorns, we’ve curated a more unusual list of Startups to Watch. This year, we’re focusing on companies that deserve the spotlight, represent fresh aspects of each of the verticals highlighted, have had recent success peaks, or are well-hidden treasures – so far, noticed by only a few. To put this list together, we crowdsourced opinions and surveyed a bunch of startup ecosystem players over the entire Baltic region: startup organisations, selected Business Angels and VCs, accelerators and others. Then, we re-checked the collected information and opinions heard with start- ups’ websites, Crunchbase, and other pub- licly available sources.
This Startups to Watch list is meant to give an insight into the Baltic startup ecosystem, and not to be considered as evaluation or ranking of investment attractiveness or business potential of the startups included.
Startups were only compared within their respec- tive industry and categorised into 6 verticals and 3 categories – The Usual Suspects, On the Radar, and The Hidden Treasure.
THE USUAL SUSPECTS The Usual Suspects are the ones that don’t need much introduction. They’ve made headlines and are role-models in their countries. Those are startups that have raised more than €1M, are global, have a team of more than 30 people, and are steadily grow- ing. That being said, we have excluded unicorns and extraordinarily fast-scaling startups – they already receive enough attention.
ON THE RADAR The startups that have already made a mark in the market and ecosystem and are put into the On the Radar category. Startups in this category have raised above €100K, launched their product and attracted paying customers, and have moved outside of their home market. These startups have a significant media presence and/or have received noteworthy awards. THE HIDDEN TREASURE
In The Hidden Treasure category, we have included early-stage startups that have raised below €50K, are launched in their home markets, are showing great potential, but might not have any significant traction just yet. Nevertheless, some of the startups listed in this category have traction, but lack visibility in the market and ecosystem. This category is curated, highly relying on the stakeholders’ input and recom- BALTICmendations. STARTUP SCENE Report 2018—2019 46 Startups to Watch B2B & SOFTWARE AS A SERVICE There are quite a few successful B2B and SaaS startups that are putting the Baltics While a small market of 6 million high tolerance for mistakes’’ – on the world map. Estonian startups Pipe- drive, Scoro, and Realeyes have altogether inhabitants is probably not something repeatedly emphasized raised €80.5M – and that’s just in 2018/2019. the perfect place to test and by a number of startups Latvia, in the meantime, is becoming al- grow B2C startups, it offers a interviewed for this report. That most a synonym for printing and drop-ship- lot of advantages for the B2B makes the Baltics a great, low-risk ping businesses thanks to Printful and Prin- segment. To name a few: easy place for testing new business tify. And of course, there’s Lithuania’s B2B startup Oberlo, now owned by the Canadian models and products. access to high-level executives e-commerce heavyweight Shopify and one and ‘’the region’s comparably of the region’s exit success stories.
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS FRACTORY LOKALISE CGTRADER Online marketplace for sheet metal Translation management system 3D models for VR/AR and CG projects fabrication services SELLFY PIXEVIA MEETFRANK E-commerce platform for creators Retail automation and analytics Talent recruitment app EDURIO automation for creators Web-based tools for education quality WHATAGRAPH improvement Marketing analytics and social media reporting INTERACTIO Zero-hardware, real-time translation and interpretation solution on the mobile ON THE RADAR phone PACTUM FULFILLI OMNISEND AI-based system for contract negotiation Marketplace for digital agency services Email marketing designed for on a massive scale e-commerce ASYA.AI DASHBIRD App for mindful conversations powered Serverless monitoring and de-bugging by Ethical AI platform OROCON TIMBETER Construction management platform Digital timber measurement solution CENOS ZELOS 3D modelling & simulation software for Volunteer management app induction heating applications VUMONIC DATALABS Market tracking and competitive intelligence THE HIDDEN TREASURE SIFR AGROPLATFORMA POMODONE APP Artificial intelligence for corporates B2B marketplace to connect grain growers, Pomodoro timer for productivity tools grain buyers, and the stock market VITS Virtual health and safety specialist PARTLY Mobile application that connects trusted service providers with on-demand job BALTIC STARTUP SCENE Report 2018—2019 opportunities Aleksandrs, Co-founder of OROCON, Techchill Publicity Photo FEATURED STARTUPS OROCON INTERACTIO Country: Latvia Country: Lithuania Year of founding: 2016 Year of founding: 2014 FACT 18 Founder(s): Aleksandrs Svaikovs, Andrejs Founder(s): Henrikas Urbonas, Simona Cumakovs Andrijauskaite, Domas Labokas Investment: €245K Investment: €1.3M Zelos’ CTO Viktor Lillemae was Website: orocon.me Website: interactio.io once retweeted by Nassim OROCON is a construction site management Interactio is a mobile system for real-time Nicholas Taleb, the famous solution that helps reduce construction interpretation in events like conferences, Lebanese-American essayist, operational problems. Focused on business training, meetings, webinars, etc. Some of their daily requirements, the software collects data scholar, statistician. best-known clients include WebSummit, Google, used for business analytics, risk management, Microsoft, and Amazon. and experience sharing between team Before Interactio, the co-founders developed members. real-time audio broadcasting solutions for Prior to co-founding OROCON, Aleksandrs events. As demand grew, the team took a closer Svaikovs had spent 15 years in construction look at the problem and realized that there’s a ZELOS project management. Having experienced huge problem no one is tackling. Just in the US Country: Estonia what it’s like to manage six projects in different alone, there are around two million business Year of founding: 2018 towns at the same time, he realized that meetings every year, a growing Spanish- Founder(s): Johanna-Mai Riismaa, Viktor communication over a long distance is often speaking population, and no cost-effective Lillemäe ineffective. Processes, as well as data and and easy-to-use solution. So, they created Investment: €317K information exchange had to be changed, hence Interactio. Website: zelos-app.com the idea of OROCON was born. Where are they now? Five years after Zelos is a task management app for causes In 2019, the OROCON team has grown from 20 to launch, Interactio is a market leader in the and communities that get things done with 35 people, their solution is used in the Baltics, Interpretation & translation industry, has clients the help of volunteers. The company gives Poland, Finland, and Spain. The startup recently in over 60 countries, and is used in close to cause-oriented organisations the means for closed an A round investment and is one of the 600 events every month. Needless to say, the engaging with volunteers in a modern way, top solutions in the construction market. company is growing at lightning speed and has improving communication, task management, tripled their revenue in 2019. and collaboration. After 15 years of coordinating large volunteer teams for events and festivals in Estonia, co- founder Johanna saw an opportunity to make FACT FACT 17 the crowd management process more efficient 19 with a simple and standardised job dispatch format. In November 2019, Interactio Zelos is one of the very few Estonian startups OROCON is a team of hard- was used in WebSummit in successfully engaging the non-profit sector. working individuals. There’s Lisbon – one of the world’s The startup has users in 28 different countries, even an inside joke – when leading tech conferences. ‘’Our some of their customers including Latitude59, someone asks how many hours solution enabled WebSummit Odessa International Film Festival, and Burning a day they work, the answer is: Man Ukraine. speakers to address the crowd ‘’From 8am to 8pm, just half of of 70k+ people in 5 different the day.’’ languages,’’ says Henrikas Urbonas. 48 Startups to Watch
EXTENDED FINTECH At the moment, Fintech is one of the dominant startup verticals in all three Baltic countries. Interestingly, many of the region’s current Due to Latvia’s friendly peer-to-peer (P2P) The ICO craze that we observed in 2017/2018, Fintech superstars seem to have been born regulations, it’s no surprise that some of has left a mark on the Baltic Fintech scene, from challenges that the founders experi- the country’s best-performing startups are especially in Lithuania. How could it not af- enced while living abroad, especially in the P2P loan providers TWINO and Mintos. An- ter such successful ICOs like Monetha that UK. Estonian unicorn Transferwise, as well other common segment in the region – Fin- raised $37 million in 18 minutes and Change as Monese (Estonia) and TransferGo (Lithu- tech solutions related to ticketing and pay- Bank that raised $17.5 million? Now, the ICO ania), are tackling common challenges peo- ments. Although neither Ridango (Estonia), noise has ceased, but you’ll still find various ple face when living and working abroad, nor Mobilly (Latvia) are considered startups projects related to crypto and blockchain. such as money transfer fees and complex- anymore, they’re still worth mentioning – ity of opening a bank account. their solutions have become an integral part for people taking public transport or We call this vertical Extended Fintech, as paying for parking. the list also includes LegalTech and In- surTech startups. However, you will find startups tackling KYC, authentication, and verification in the Cybersecurity vertical.
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS INSLY NORDIGEN FACTRIS Cloud-based insurance software for Account data analytics solution for credit Flexible credit lines and invoice factoring insurance brokers and agents scoring XOLO CRASSULA Company set up platform in the EU Digital banking for entrepreneurs
ON THE RADAR HUGO.LEGAL LASTBIT.IO COINGATE AI-powered legal service platform A platform to securely store and manage Payment gateway for cryptocurrencies cryptocurrency MONTONIO MOQ Financing solution with comparable Application for shopping by phone credit offers
THE HIDDEN TREASURE CACHET KLIX.APP OONIQ Personalised insurance for ride-hailing A digital wallet to streamline the Peer-to-peer insurance solution drivers checkout experience for shopping online HODL FINANCE SCORIFF European Digital lending company Behavioural business credit scoring BAILSMAN Third party guarantee solution
BALTIC STARTUP SCENE Report 2018—2019 49
FEATURED STARTUPS KLIX.APP Country: Latvia CACHET Year of founding: 2018 Country: Estonia Founder(s): Citadele Banka (led by Eduards Year of founding: 2018 Timofejevs) Founder(s): Hedi Mardisoo, Kalle Palling Investment: n/a Investment: €300k Website: klix.app Website: cachet.me Klix.app is a new checkout standard for smarter Cachet is a consumption-based insurance shopping. It enables faster checkout for online platform and wallet, currently focused on shoppers by using previously-stored checkout gig economy service providers. Their first details, including payment information and customers included Bolt, Uber, and Yandex.Taxi delivery address. This helps online retailers drivers. significantly improve checkout speed, cut down the cart abandonment rate, and, at the end of When Hedi and Kalle started Cachet, there the day, sell more. was a heated debate in the media around ride-hailing platforms and the lack of suitable Nearly 70% of online shopping carts are insurance products. The price part-time drivers FACT abandoned because people are unwilling to fill were required to pay for insurance was unfairly 21 long forms or remember yet another login and high. The founders noticed this issue and password. After conducting over 2000 surveys decided to offer a solution – flexible insurance and user tests, as well as extensive market products for gig economy workers. HODL Finance was launched research, the creators of Klix.app confirmed and the founders’ kids were their suspicions: there is a massive demand In the first two weeks after launch, nearly born in the same year. Now for a streamlined checkout experience when 10K price offers were generated through the shopping online. Klix.app was created as a five years old, Vytautas and platform. Cachet also managed to sign up solution. almost 10% of their total target audience to Gintautas call HODL Finance their platform. their ‘’toddler’’. In one year, Klix.app has grown to a team of nine people and managed to land ForumCinemas, As of November 2019, the startup has partnered one of the largest film theaters in Eastern up with Bolt, Uber, Yandex.Taxi, and BTA Europe, as one of their first clients. Insurance. Next, the team is looking towards the hospitality industry with Booking.com and Airbnb at the forefront. HODL FINANCE Country: Lithuania Year of founding: 2018 Founder(s): Vytautas Zabulis, Gintautas FACT Scerbavicius 22 Investment: undisclosed FACT 20 Website: hodlfinance.io The creators of Klix.app HODL Finance helps crypto apps to offer banking services to their customers, like have counted that it takes Neither of the co-founders had crypto-backed loans, interest payment for on average 23 steps for an experience in the insurance bitcoin, and simple and easy on-ramp services. online shopper to go through industry. ‘’We constantly All these services are delivered via API. the checkout process. That’s annoyed our advisor with The idea of HODL Finance was born when the around 95 seconds – enough wrong insurance terms,’’ says founders started to offer crypto-backed loans in to change one’s mind, get Hedi Mardisoo, CEO. But that euros to their customers. They quickly learned distracted, and abandon the that this kind of service is interesting to many didn’t stop them – they knew checkout. crypto applications, and the rest is history. the insurance pricing for part- time drivers was unfair, and Today, the startup works with some of the industry leaders and leading crypto they were determined to solve applications. The startup has also received the problem. investment from Pirate Equity VC and just this autumn, made a deal with one of the largest crypto wallets that the company cannot yet disclose.
BALTIC STARTUP SCENE Report 2018—2019 50 Startups to Watch
CYBERSECURITY & VERIFICATION
Due to their geopolitical situation, Looking at the startup scene today, there With the rise of Fintech, the PSD2 directive the Baltics have always been are some high growth companies originat- coming into play, areas like verification, ed from this region: Tesonet (Lithuania), AML, KYC, and encryption are receiving a lot security- focused. In 2007, Estonia Cujo AI (of Lithuanian origin), and Defendec of attention. And many startups in the Bal- survived a major cyber attack and (Estonia), to name a few. tics are rushing to tackle these challenges. later on, cybersecurity became One of the frontrunners is the YC graduate, In 2018 Startup Wise Guys, in close collabo- Estonian startup Veriff, that provides web one of the key focuses for the ration with the Estonian defence industry, and mobile identity verification solutions. Startup Estonia organisation. launched Europe’s first Defense AI and cy- Founded in 2015, the company has raised bersecurity-focused accelerator program €7.2M and grown their team to 300 people. called ‘’CyberNorth’’. The program served as a magnet for international cybersecurity startups that came to base their business- es in the Baltics.
ESTONIA LATVIA LITHUANIA
THE USUAL SUSPECTS RANGEFORCE Cybersecurity training platform ON THE RADAR WEBARX INLABLE IDENFY Web application security platform Most versatile labeling and authenticity Identity verification services verification system that cannot be SALV reproduced or compromised, both ONDATO physically and digitally AML platform to beat crime Real-time video customer identification NOTAKEY and KYC services TRAPMINE Next-generation endpoint protection Secure way to notarise digital platform transactions and electronic documents
THE HIDDEN TREASURE AUTOM8 ENTANGLE Source code security analysis enabled by Quantum encryption for business and machine learning private communication KEYSTROKE DNA LAHDES Behavioural biometric authentication eDocument management system with service strong customer authentication
CYEX AI based tool for personalized cybersecurity exercises
BALTIC STARTUP SCENE Report 2018—2019 Day Investor at a demo showing Cyex of Founders 51
FEATURED STARTUPS NOTAKEY FACT 24 Country: Latvia Year of founding: 2016 ENTANGLE Founder(s): Gints Kiršteins, Jānis Kiršteins, Country: Latvia Before starting Autom8, the Jānis Graubiņš Year of founding: 2017 founders were both working Investment: €215K Founder(s): Maris Kronbergs, Girts Kronbergs at their own Artisan Bakery Website: notakey.com Investment: n/a & Patisserie in their free Notakey is a smartphone-based platform that Website: entangle.tech time. Serkan Cavusoglu provides e-businesses and enterprises with a There are many ways how someone with has a Diplôme de Pâtisserie highly secure user authentication, as well as single-sign-on and password-less solutions sufficient interest and resources can Certificate from Le Cordon eavesdrop on your smartphone by exploiting based on Multi-Factor Authentication (MFA). the ever-growing tech vulnerabilities. Bleu. Their technology provides the same level Entangle has developed a device that, put of security as hardware-based e-signature onto your smartphone, creates an encrypted solutions. quantum communication channel for business Notakey not only replaces inconvenient and individual users to share confidential AUTOM8 hardware solutions, it also helps companies information. Country: Estonia comply with PSD2 (the second Payment Entangle founders noticed that cybersecurity Year of founding: 2019 Services Directive), designed by the European and privacy are degrading rapidly, which pushed Founder(s): Pinar Soyata, Serkan Cavusoglu Union. Among other things, the directive them to develop new tools for communication. Investment: €40K requires stronger identity checks when paying That resulted in the Entangle quantum Website: autom8now.com online, which is where Notakey comes into play. communication system. At the moment, the Autom8 provides vulnerability detection – Their solution is already used by a number of product is in a prototyping and testing phase supported by machine-learning – for securing enterprise-level companies in Latvia. Some and is planned to be finished in 2020. enterprise applications. Their approach is a of their biggest clients include the national The Entangle team is collaborating with the revolutionary and highly effective way to secure airline AirBaltic and one of the country’s leading leading national academic research institution, applications in real-time, allowing to ensure telecommunication operators, LMT. Riga Technical University, the Faculty of rapid resolution of security vulnerabilities with Electronics and Telecommunications, in the the highest accuracy. further development of their quantum-based Having spent more than 7 years focusing on technologies. static code analysis, the co-founders noticed that the traditional SAST approaches to source code security are failing in terms of speed and FACT accuracy. The team felt that there’s an urgent 25 need for a new approach that would replace the FACT legacy system with a brand-new perspective, in 23 order to ensure rapid identification of security Two of Notakey’s co-founders vulnerabilities. are brothers Gints Kirsteins and Janis Kirsteins, who Entangle founders are In 2019, Autom8 launched their SaaS platform, where students and freelance developers can were also involved in the creatively spirited – they play test the security of their applications. This development of the Latvian music and create graphic platform is free to use but has a constraint of 2 State ID Card and electronic designs in their free time. million lines of code. For now, the startup plans signature architecture. to stick to this business model for the purpose of supporting and educating students. Pinar, Co-founder of Autom8 of Co-founder Pinar,
BALTIC STARTUP SCENE Report 2018—2019 52 Startups to Watch
PROPTECH
In spring 2018, Lithuania Looking at the curated Startups to Watch introduced the first PropTech list, it becomes obvious that the scene is dominated by marketplaces and Proptech sandbox in the world, aimed at startups that go hand in hand with Fintech companies worldwide and inviting – P2P lending, crowdfunding, and similar. them to test their solutions and However, to give you a broader spectrum launch pilot projects in the Baltics. of Proptech in the Baltics, we have also It’s also one of the few business included projects related to short-term renting, as well as professional imaging areas where startups and services. companies from all three Baltic countries have managed to work together and create a network of innovation, called PropTech Baltics.
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS ESTATEGURU GIRAFFE360 Marketplace for short-term property- Subscription product for real estate backed loans companies to streamline professional quality photographs and floor plans ON THE RADAR CONSORTO BULKESTATE CLUSCO Marketplace for commercial real estate Real estate crowdfunding and group- Marketplace for construction equipment buying platform rentals GUESTJOY Guest management system MODERAN Commercial real estate lease lifecycle management software THE HIDDEN TREASURE VARTUS PROFITUS Real estate valuation tool Property backed investments HOUSEYS Professional short-term rent management UNTU Marketplace for real estate owners and agents
BALTIC STARTUP SCENE Report 2018—2019 53
VARTUS FEATURED STARTUPS FACT 27 Country: Latvia Year of founding: 2017 HOUSEYS Founder(s): Oskars Gavrisevs, Raul Abreu Country: Lithuania Founders of Moderan take the Investment: n/a Year of founding: 2018 saying ‘’building a startup is a Website: vartus.eu Tomas Grizas, Agota Luksaite, Founder(s): marathon, not a sprint’’ very Vartus helps home-owners, home-seeker, and Eduard Titov literary. The trio say they train financial institutions to assess the value of a Investment: €30K their endurance by regularly property before they make a big decision. As Website: houseys.com attending the 63K Tartu cross- they say themselves, Vartus can answer any Houseys is a solution that helps real estate country skiing marathon. question about the value of real estate with owners maximize their revenue, provides short- data. The company aims to become a major term rent and revenue management, as well as player in Proptech in Eastern Europe. welcome guests to these accommodations. For the past two years, Vartus has been working Houseys co-founder Tomas ‘’fell in love’’ with the on gathering data, developing AI tools, and idea of the sharing economy back in 2013/2014. MODERAN making strategic partnerships. In 2019, the He put his loft on Airbnb, which helped him company partnered with Colliers International, make new contacts in the industry. Soon after, Country: Estonia the global real estate organization and one of he already had other apartments to manage. Year of founding: 2015 the leading players in the Eastern European When Agota joined with ‘’bags of experience Founder(s): Kristi Hakkaja, Jaanus Sellin, Raiko region. in hospitality’’ and Eduard with technical Uri Their other achievements include collaboration expertise, the founding team was completed. Investment: €270K with a number of enterprise-level companies Website: moderansolutions.com In the first three quarters of 2019, Houseys and assisting them with their real estate welcomed more than 7000 guests from 70+ Moderan is a SaaS platform for real estate portfolio valuation. Vartus also works on countries and generated €500K in bookings. In management automation. Some of the developing custom AI-powered calculators for 2020, the company is planning to reach €1.5M in leading real estate players across the Baltics their clients and plans to expand to other Baltic bookings and grow the revenue 3.5 times – and and Germany use Moderan to maximize states in the near future. that’s in Lithuania alone. their property revenue and value – including Rotermann City in Tallinn, VEF quarter in Riga, coworking brands TechQuartier (Frankfurt) and Workland (Baltic). The founders saw a huge unmet market demand FACT – 65% of all companies were still managing real FACT 26 estate in Excel. The existing software solutions 28 were built for the large players in the industry, and were too complex and expensive for SMEs. One of Houseys’ guests once Moderan was made as a solution that fills the Oskars is from Latvia, while complained that he’s not happy gap. Raul comes from Mexico. with the apartment. ‘’He said Oskars codes in Java, Raul As of today, real estate with the combined value that there was no bed, so he of more than €1 billion is already managed – in Python. Oskars is a had to sleep in the armchair. in Moderan. According to the founders, even software engineer, Raul – an But it turned out that he had though the industry is difficult to enter, clients economist. The co-founders simply missed that there’s are very loyal – instead of churn, existing are very different, yet they both another room in the apartment customer revenue keeps growing organically. share a passion for solving And so does the company. – the bedroom, with a bed and big problems with data and everything!’’ technology.
BALTIC STARTUP SCENE Report 2018—2019 54 Startups to Watch
SUSTAINABILITY & HEALTH
The Baltics have a long history While DeepTech, HealthTech, and various therefore no surprise that many startups in and tradition of deep engineering. science-based startups are common in the this vertical are tackling questions of how Baltics, business angels and VCs tend to be people can live longer, heal faster, and di- While still being a part of the hesitant to invest in early stage rounds due agnose diseases earlier. Soviet Union, the region was to slow initial traction. Therefore, access to This vertical also includes startups focus- well-known for its engineering Horizon2020 and other EU-supported pro- ing on sustainability – a topic currently grams like EIT Climate kic and others, have innovations and manufacturing being more important than ever. There are played an important role in supporting R&D companies like VEF (Latvia). examples from the energy sector, Science- programs in universities and startups. Understandably, a great focus was Tech, and GreenTech, all working on creat- put on education in the fields of The Baltic states are a desireable location ing a better future for humankind. drawing many international students. Not science and tech. Decades later, only do universities provide international- there’s still a strong R&D culture ly recognized education, they’re also tap- in educational institutions of all ping into innovation, organising various levels. HealthTech hackathons and programs. It’s
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS ALINA OXIPIT.AI Clay mineral materials to substitute AI-based medical imaging solutions hazardous chemicals in construction SOFTNETA EXONICUS Medical imaging and intelligence VR-based medical trauma simulator ON THE RADAR POWERUP FUELCELLS CONELUM CASZYME Sustainable energy generation products Rapid microbiological diagnostic tests Innovative applications and research for the food and drink industry in the field of CRISPR based molecular tools THE HIDDEN TREASURE PRECISION NAVIGATIONS VERITACELL BRACHYDOSE SYSTEMS Methodology for enhanced skin renewal Cancer treatment quality control tool for Software and hardware solutions for oncologists precise GPS positioning and navigation ARTUSYSTEM Universal alternative fuel retrofit for DROPLET GENOMICS diesel common-rail engines Precision microfluidics for molecular biology PVSTREAM Web-based all-in-one platform that supports Solar Project development
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FEATURED STARTUPS DROPLET GENOMICS Country: Lithuania Year of founding: 2016 VERITACELL FACT 30 Founder(s): Linas Mažutis, Karolis Leonavičius, Country: Latvia Dalius Kučiauskas, Juozas Nainys Year of founding: 2018 Investment: €500K Founder(s): Aigars Vītoliņš, Arsenijs Sergejevs, The Precision Navigation Website: dropletgenomics.com Christopher John Dunnill, Evija Vaščenko, Systems team comes from Droplet Genomics develops tools for complex Kaija Kurme-Jansone, Nikolaos Georgopoulos, Siberia, or ‘’the middle disease diagnostics. Their solutions are based Commercialization Reactor Fund on droplet microfluidics technologies, which €50K of nowhere’’, as they say Investment: allow to analyze patient samples at single cell veritacell.com themselves. ‘’This fact is a Website: resolution. This provides unparalleled insight source of a lot of jokes about VeritaCell is a biotech startup developing a into complex biological systems, for example – medical kit for surgeons, which enhances skin cold weather, riding bears cancer tumors. regeneration in cases of large skin wounds topless, traveling to Europe by The idea of Droplet Genomics came from one and damages when the skin’s natural ability to bus in 4 days, etc.’’ of the founders, dr. Linas Mažutis. He had heal is lost. With their product, surgeons can developed a technology for high-throughput prepare a solution with the patient’s own cells analysis of genetic material of single cells. to be applied to the damaged area. That can be It became clear that this technology could done in 30 minutes, straight in the operating revolutionize how complex biological samples room, and with no laboratory equipment PRECISION NAVIGATION are analyzed, and therefore has the potential needed. Areas of application include large beyond fundamental science applications. burns, scar and tattoo removal, beauty care, and SYSTEMS 3D skin printing. Country: Estonia As of today, Droplet Genomics is a team of 12, Year of founding: 2018 they’ve launched 3 hardware products and The idea came from the University of Founder(s): Simon Litvinov, Dmitrii Kislenko delivered over 250 orders. The team has also Huddersfield where two of the founders, Investment: €88K completed 2 contract research projects and 15 Nikolaos Georgopoulos and Christopher John Website: prns.io custom manufacturing projects. Dunnill, did their research on the possibility to isolate dermal cells in no-laboratory conditions. Precision Navigation Systems is developing The product is now in its developing phase, software and hardware solutions for the variety planned to be in the market by the end of 2020. of non-standard applied and infrastructural tasks using precise GPS positioning In September 2019, VeritaCell won the local technologies. round and went to the finals of She Loves Tech 2019 in Beijing, China. The team attracted Their flagship project – HIVE – is a cloud-based FACT 31 attention and interest from a number of Chinese solution that allows self-driving cars, drones, companies and investors. robots, and other GPS-equipped autonomous systems to be positioned, navigated, and How does the Droplet tracked in real-time and with up to 1-inch Genomics team stay focused precision. and energized? ‘’We’ve probably Prior to launching HIVE, the team was focused consumed more than 1000 on R&D projects and GPS-hardware. Then, RedBull energy drinks since their business model pivoted from hardware to FACT 29 software and resulted in HIVE. founding the company three years ago,’’ reveals company The project Precision Navigation Systems CEO Juozas Nainys. The VeritaCell team says works on is unconventional, futuristic, and complex. But the team has already proven that they believe in miracles and they can build great things. One of such things that science fiction is just a is the largest service for land surveyors, built in prediction. Russia. As of today, the company has already connected HIVE to four GPS reference stations in Latvia, Estonia, and Sri-Lanka. They’ve also launched pilot projects with Starship Technologies, Zubax, Lumebot (Estonia), Motor Ai (Berlin), PILOT Automotive Labs (Singapore/ USA).
BALTIC STARTUP SCENE Report 2018—2019 56 Startups to Watch
HARDWARE, IOT Now, all robots and jokes aside, startup founders in the Baltics are well known for their readiness to tackle complicated chal- lenges. This is where a lot of unique solu- & ROBOTICS tions in the sectors like hardware, robotics, and IoT have come through. Lately, seeing Starship the country also hosts one of the We’ve left out superstars like Starship largest robotics conferences in Technologies’ autonomous robots Technologies (Estonia) and Click&Grow in the streets of Tallinn, minding the world – Robotex. (Estonia) from our Startups to Watch list, their business doing deliveries, Lithuanians, in the meantime, as these startups already have all the global has become a common sight. are praising their education fame they deserve. Instead, in our curated list you’ll find a variety of startups that are Rumour even has it, there might programs in robotics, while building the next engineering masterpieces be other robots cleaning the snow Latvians often bring home prizes – from drones to guitar pedals, from sen- from the streets this winter. And from international Robot Sumo sors to 3D printing, and even a robot-bar- speaking of Estonia and robotics, championships. tender and robot-muralist.
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS OPTOFLUID AERONES NANOAVIONICS TECHNOLOGIES Industrial heavy lifting drones Multi-purpose nano-satellite bus Sensors for real-time and on-line dyalisis quality monitoring SPRAYPRINTER Smart spray paint technologies and robot muralist ON THE RADAR 1OT GAMECHANGER AUDIO RUBEDOS SISTEMOS Cellular conectivity for IoT Hardware products for musicians Unmanned missioning and computer vision solutions for industrial LUMEBOT HACKMOTION applications Autonomous street cleaning robots Specialized wrist measurement and training tool REBELROAM Data traffic optimization service and on- VIVID TECH board Wi-fi routers Interactive shelf edge displays SMARTVENT CASTPRINT Software add-on for existing building 3D printed medical casts automation systems YANU SQUAD ROBOTICS Fully autonomous AI and robot APMS and indoor marker sensors for empowered bartending unit manufacturers of cleaning machines THE HIDDEN TREASURE FLOK ATLANT3D AERODIAGNOSTIKA Narrow-band IoT GPS-tracking device Atomic 3D printer with material Multifunctional fixed-wings drones and versatility aerial diagnostics services KINGDOM TECHNOLOGIES Robotic lawn mower for large terrains SNOWISION Automatic small-sized sensors for projecting 3D maps of snow cover BALTIC STARTUP SCENE Report 2018—2019 57 Sigvards, Co-founder of Castprint of Co-founder Sigvards,
FEATURED STARTUPS
LUMEBOT GAMECHANGER AUDIO Country: Estonia Country: Latvia FACT Year of founding: 2019 33 Year of founding: 2016 Founder(s): Andres Kõiva, Kaspar Kikerpill, Founder(s): Ilja Krumins, Martins Melkis, Juhan Viik, Siim Medijainen, Alvar Suun, Arnold Kristaps Kalva, Didzis Dubovskis Kasemaa, Ulf Anso, Joonas Annok, Taavi Sööt Flok once received a Facebook Investment: n/a Investment: undisclosed message from a customer who Website: gamechangeraudio.com Website: lumebot.com was interested in ordering Gamechanger Audio’s mission is to create Lumebot develops autonomous street cleaning trackers for his giant tortoises. new musical instruments that stretch the robots that sweep streets from dirt and snow, ‘’That was something new and imagination of musicians and engineers alike. depending on weather conditions. Their robots funny for us. But apparently, The company was started in 2016 by four friends make it possible to automate routine cleaning those tortoises are fast!’’ who shared the passion for music. tastsk and provide street cleaning 365 days a The founders say they’re honored that their year. products – PLUS Pedal and PLASMA Pedal – The team met at a robot-building competition have already become an important part of with a special focus on robots for snow artists’ creative processes. Some of the music removal. Even though they were left second in legends, including Jack White, members of The the competition, the founders saw the market FLOK Rolling Stones, Tool and Rammstein, are fans of potential and opportunity for their newly-built their products. Country: Estonia solution. Year of founding: 2015 In 2019, Gamechanger Audio closed another According to one of the co-founders Kaspar Founder(s): Pearu Praakle, Triinu Hansen successful crowdfunding campaign for their Kikerpill, the startup has already reached a Investment: €120K latest product Motor Synth – the first electro- point where the market demand for their robots mechanical commercial desktop synthesizer. Flok is the next-generation GPS tracker that is overpowering the ability to supply them. Due It has already received positive reviews from uses the new LTE-M/NB-IoT technology, instead to climate change and a lack of a blue-collar globally-known electronic artists Jean-Michel of 3G. The use of the latest technology allows workforce, this demand is only going to grow. Jarre and Richard Devine. Flok to offer the most reliable tracker in the The startup plans to reach over €45 million in market with maximum positioning accuracy and annual revenue by 2025. a long battery life. The idea for the Flok tracker was born when one of their co-founders lost his dog. That’s when he realized that the market is lacking a reliable and FACT 34 FACT 32 accurate tracking device that would not only allow you to keep an eye on your belongings, but also loved ones – family members, pets, etc. Gamechanger Audio’s recent Lumebot’s office is located in Until November 2019, the company has sold Kickstarter campaign for Motor an old sauna building that’s now over 1000 units and is currently negotiating Synth reached its fixed goal of turned into a robot studio. ‘’We partnerships with some of the leading telecom $50,000 in just ten minutes and can safely say that we have companies in the Nordic region. Flok is also $100,000 in two hours. the biggest office sauna in about to launch their Kickstarter campaign in Estonia!’’ the US market. - Kaspar Kikerpill
BALTIC STARTUP SCENE Report 2018—2019 58 Startups to Watch
TRANSPORTATION, MOBILITY & LOGISTICS The mobility sector is clearly help cities like Berlin, Prague, and While globally ride-sharing is becoming booming in the Baltics. The others to embrace the mobility mainstream, it’s interesting to see how Bal- tic startups are moving towards micro-mo- region is not only home to Uber- revolution. bility, creating services and platforms for challenger and European unicorn It’s also worth mentioning that, looking back electric cars, and building hardware-based Bolt (ex-Taxify, Estonia), but also at the biggest funding rounds in the Baltics, solutions for security, monitoring, and envi- Lithuanian mobility platform Trafi. the mobility sector definitely stands out. ronmentally friendlier commuting. Mobility startups Bolt and CityBee (Lithu- So far, the startup has raised €14M ania) dominate the top of biggest funding and has a team of 70 employees to deals in 2018/2019.
ESTONIA LATVIA LITHUANIA THE USUAL SUSPECTS CLEVERON CITYBEE Robotics-based parcel terminals and Carsharing for vans, passenger cars and click and collect pickup solutions scooters SKYSELECT Enterprise marketplace for airline industry AMPLER BIKES Light electric bike producer BIKEEP Commercial bike racks and bicycle parking systems
ON THE RADAR CARGURU MONIMOTO The first car sharing service in Latvia Smart GPS alarm/tracker for COMODULE motorcycles Digitalization tools for the light vehicle 4SMARTSTREETS industry SPARK Smart parking systems Fully electric car sharing app
ZITICITY Same-day deliveries for businesses
CHRG NETWORK THE HIDDEN TREASURE Software platform for EV charging SEARADAR SIZZAPP International yacht charter aggregator Vehicle tracking and monitoring device
MARINE DIGITAL GORAMP Warehouse management system for bulk Online transport management system terminals BALTIC STARTUP SCENE Report 2018—2019 59
FEATURED STARTUPS SIZZAPP Country: Latvia SEARADAR Year of founding: 2017 FACT 36 Founder(s): Vjaceslav Gorbacov, Denis Moldovan Country: Estonia Investment: €50K Year of founding: 2017 https://www.sizzapp.com/en Founder(s): Dima Beznasiuk, Max Terbov Ugnė Palionytė, GoRamp’s COO, SIZZAPP is an automotive safety and services Investment: n/a is the only woman in the four- platform that connects vehicle owners and https://searadar.com/ person founding team. ‘’We are users with their cars and favorite services via Searadar is a marketplace for yacht booking. very proud of her,’’ says CEO mobile app. The company helps professional captains to Jevgenij Polonis. Having spent over 10 years in the industry, the find and book yachts from all over the world, founders noticed that while the world is going with special discounts and custom options. towards digitalization and connectivity, there The founders met and came up with a business were no proper solution for private vehicles – idea when passing their exams for a skipper and decided to build one. license. They saw a lack of technology in the GORAMP Today, the startup has put a special focus yacht industry and decided to combine Dima’s on motorcycle riders and has already caught skills in IT and Max’s knowledge in yachting to Country: Lithuania attention from industry giants like Schaeffler launch Searadar. Year of founding: 2018 AG, ADAC, and Harley Davidson. SIZZAPP has Founder(s): Jevgenij Polonis, Marius Repečka, 6 employees and their solution works in 18 Today, Searadar offers one of the best-known Ugnė Palionytė, Justas Maziliauskas countries worldwide, though for now, it’s yacht booking solutions in the industry. The Investment: €120K only available for purchase in Latvia. The startup is scaling incredibly fast, despite having https://main.goramp.eu/ received no outside investment. As of the end company has 200 users, the team has also of October 2019, the company had more than GoRamp is a transportation management signed contracts with 20 companies and 2 300 paid charters and over €700K of Gross system that helps SME manufacturing international distributors – ALSO Holding AG and Merchandise Volume (GMV). companies deal with the problem of Euro DK. decentralized information exchange and lack of transparency during supply chain management. Their solution promises to automate 70% of manual work, increase communication 4x, and save 20% of the budget spent on logistics. FACT The founding team has a total of 21 years of 37 FACT 35 experience in logistics and, as one of the founders says, they perfectly know the pains of the industry and SMEs. That helped them Vjaceslav’s and Denis’ wives When the British digital build a solution to ease these pains, which is are active users of SIZZAPP, journalist Stewart Rogers already well-received and recognized. Today, especially when the co- GoRamp has 15 manufacturing companies as interviewed one of the founders are in the office paying customers, and they’ve onboarded more working late. ‘’My wife can founders of Searadar, he than 500 transportation companies as service always check my location named his podcast ‘’The Bad providers. Boys Of Tech”. ‘’Maybe we look through SIZZAPP that’s like harsh sea wolves?’’ Dima installed into my car. In a way, wonders jokingly. SIZZAPP supports strong and trusted families!’’ Vjaceslavs says. Techchill publicity photos Techchill
BALTIC STARTUP SCENE Report 2018—2019 LONGER READS
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BALTIC STARTUP SCENE Report 2018—2019 62 Longer Reads
ACCESS TO TALENT IN THE BALTICS – WHAT CHALLENGES
The total population of the Baltic DO LOCAL states is just over 6 million, but when it comes to availability of qualified workforce, this region may look more tempting than some STARTUPS FACE? other European countries. According to the latest data by OECD (Organisation for Economic Co-operation and Development), nearly 47% of the Baltic workforce between the ages of 25 and 34 has a higher education. That puts the region next to countries like France, Iceland, and New Zealand. The countries also see a constant- ly growing number of graduates in the field of ITC (information and communications technology) – in 2018, 4.4% of university graduates in the Baltics were in ITC. That’s above the EU’s average of 3.5% and nearly a 19% increase when com- pared to the year before. Finally, the Baltic states are well known for their multilingualism – 92.6% of the population speaks at least two languages. For this and the other reasons mentioned above, as well as due to compara- bly lower salaries, several inter- national companies have opened their offices in this region. Take Swedbank as an example. Not too long ago, the Swedish bank moved its mainframe administration functions to Riga, as main- taining the team there was more cost-effi- cient than in Stockholm. Another example – the payments startup SumUp that recently opened an office in Vilnius, and mentioned
Latitude59 publicity photo
BALTIC STARTUP SCENE Report 2018—2019 63 Daniel, Co-founder of Cyex of Co-founder Daniel, the available tech talent pool for recruiting the situation will only get worse. In fact, the choice but to take employees away from as one of their reasons. overall population is ageing so rapidly that other local businesses. Such practice can by 2050, the working-age population could mainly be observed between growth-stage However, there are some but’s. reach an all-time low. startups that need to scale their teams as Even though the Baltics can be proud of quickly as their businesses grow. Already today, local companies are fighting their highly qualified workforce, there are for the workforce, as the demand is higher That being said, ‘’it’s important to keep in also some serious hiring challenges local than the supply. As a result, to grow their mind that the local workforce making the businesses are facing. Here are the main startups, founders often need to import rounds through startups is a natural thing,’’ reasons why some of the Baltic startups staff from other countries. says Raimonds Kulbergs, serial entrepre- feel the need to open offices in other coun- neur, former CEO of Klix.app, now Salto.co tries, outsource specific skills, and import co-founder and Chief Revenue Officer. -Ac their workforce from abroad. ‘’The Estonian startup ecosystem is grow- cording to him, it’s not always about start- ing very fast, and we’ve reached the point ups luring employees from each other, but where the demand for talent is simply rather about the general trait of early-stage much higher than the local market’s sup- companies – they’re very dynamic and ply. Hiring abroad not only helps to keep changing. And so are their teams. the quality of hires high, but also brings the international experience and best knowl- SMALL POND, STIFF edge in-house,’’ says Julia Jolkin, CEO of IT Talent Estonia – a recruiting company that LACK OF COMPETITION FOR helps Estonian startups find and import tal- TALENT ent from abroad. PROFESSIONALS WITH For example, Bolt has more than 40 dif- ‘’UNICORN-LEVEL’’ The small population of the region also ferent nationalities working in their Tallinn means that the talent pool – in absolute offices. According to their recruitment EXPERIENCE numbers – is rather limited. In other words, manager Nikolai Kabatsikov, the company Another challenge local startups face is the there just aren’t enough people to satis- has a team of 10 dedicated recruiters who lack of senior-level professionals with the fy the hiring needs of global, fast-growing are working on proactively attracting talent experience to grow a company from start- startups. both in Estonia and from abroad. ‘’Since the up to enterprise level. While the region has country is small and the scene is vibrant, What’s more, because of the constantly highly-motivated and well-educated peo- we are constantly attracting foreign talent high emigration that the three countries ple, they often lack the relevant know-how to complement local talent,’’ Kabatsikov are experiencing, the number of talent in to drive businesses to world-class enter- says. the region is constantly decreasing. In the prises. meantime, there’s also a catastrophically In the meantime, those startups growing For example, one of the most successful low birth rate, meaning that in the future, their teams locally, often don’t have much Lithuanian startups Vinted, the online mar- ketplace for secondhand clothing and ac- cessories, has therefore opened an office in Berlin. That gives the company access to experienced professionals that the local The Estonian startup ecosystem is growing very ecosystem in Lithuania was lacking. fast, and we’ve reached the point where the demand for talent is simply much higher than the local market’s supply.
BALTIC STARTUP SCENE Report 2018—2019 64 Longer Reads
Latvian startup Lokalise – the globally rec- position. In comparison, stats from the job TransferWise, the Estonian ognized translation management platform search website Glassdoor show that US unicorn company with their – is facing a similar problem and plans to employers need approximately 1.7 months HQ in the UK, has offices in 11 open an office in Dublin to solve it. to find a new employee. That’s two times cities around the world. Yet, faster. ‘’We feel lucky with recruiting a talented its largest office is in Tallinn, individual in Latvia now and then. How- In the meantime, Ribaciauskaite also notes Estonia – the majority of the ever, we stand a better chance to find a that it very much depends on the position. company’s 1700+ employees professional with global-level experience ‘’Junior and non-tech employees are al- are based there. in hubs like Berlin, London, or Dublin, who ways much easier to find, whereas hiring can eventually share their knowledge and tech people, especially senior developers, expertise with the bright minds in Latvia’’ may take you up to 6 months. That being says Petr Antropov, co-founder of Lokalise said, we’ve also tried hiring in Ukraine and FACT 38 who’s managing the company’s business the US apart from Lithuania, and our expe- development. rience shows that hiring tech people is al- ways hard, regardless of the country,’’ she According to Antropov, since these well- concludes. known startup hubs have a high concen- tration of fast-growing international com- Generally, the longer is the hiring process, panies, that’s also where the talent is. For the more expensive are the overall recruit- that reason, startups are taking shortcuts ment costs. It means that for startups with by opening offices there. fast-growing teams, hiring in larger and more populated startup cities, such as Ber- Asked why they’ve chosen Ireland for their lin or Barcelona, may end up costing less next location, he says: ‘’Ireland is where than finding the right talent locally, in the global companies like Hubspot, Dropbox, Baltics. Intercom, and Facebook are based. We’re looking to source experienced profession- Astra Pudane, assignment manager of the als from global leaders like these to help us global recruitment company Amrop, notes to accelerate even further.” that sometimes it’s founders’ expectations that make the recruitment process unnec- essarily long and complex.
TO SUM UP We stand a better chance to find a professional Despite the fact that the Baltic talent mar- with global-level experience in hubs like ket is quite limited, hiring locally is still rel- atively easy and cost-efficient. At least, for Berlin, London, or Dublin, who can eventually now. share their knowledge and expertise with the As noted by Nikolai Kabatsikov, Bolt’s re- bright minds in Latvia. cruitment manager, ‘’total talent hiring costs in Estonia are lower than in West- ern European countries but higher than in African markets.’’ This observation comes ARE HIRING COSTS ‘’The Baltic startup ecosystem is more from a company that operates in over 30 active than ever. The unemployment rate countries globally. Frankly, this sounds REASONABLE IN THE is at an all-time low – in Europe, it’s just about right. BALTICS? 6.5%. What does this mean? Just like the rest of the world, Baltic startups must find Due to the rather small talent market and ways to grow in a tight talent market. In the stiff competition for experienced profes- meantime, we often see startups that ar- sionals, hiring in the Baltics can end up be- en’t ready to accept that the Baltics have ing a long and costly process. reached the Western European level when it comes to salaries, and are still hoping According to Rimante Ribaciauskaite, COO to find superstar employees with years of of the Lithuanian startup Omnisend, it relevant experience for ‘’cheap’’. Obviously, takes them on average 3.5 months to fill a that’s a challenge,’’ she says.
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COMPANY CULTURE IN THE BALTIC STARTUP SCENE HOW COMPANY A DIFFERENT TAKE ON CULTURE COMES OUT IN THE THEME THE BALTICS Having a fully fleshed-out compa- With a ripening local startup scene, the Bal- Many companies, startups, and scaleups ny culture is a trademark of every tic states display pretty much every quality have embraced an internal company cul- successful modern enterprise. that would feel at home in any other startup ture. Some more vocally than others. And Whether it’s an up-and-coming ecosystem, be it that of the United States while there’s no one-size-fits-all approach, or any other developed Western Country. it is clear that the devil lies in the details startup, operated by a handful While it’s easy to picture colourful yoga and the most important factors to imple- of college buds, or the corporate balls during a brainstorming session, the menting company culture in an organiza- hallways of a seasoned compa- reality of the Baltic startups is a bit differ- tion are: early implementation, repetition, ny. Apart from being a clear sign ent. communication and prioritization. of a forward-thinking enterprise, To get a better mental image, try pictur- Here are a few ways Baltic startups are company culture is directly linked ing the same colourful startup scene you’d making these principles present in their or- to employee satisfaction and pro- associate with the entrepreneurial giants ganizations. ductivity – a crucial relationship, residing in San Francisco, but distil it with and one that’s best not overlooked a bit of Nordic restraint, a shared apprecia- by any business-savvy team leader tion for punctuality and less enthusiasm for out there. abrupt changes. Clear communication Practising a blend of team-first culture, of values horizontal corporate culture and clan cul- One of the defining factors of a compa- ture, startups in the Baltics tend to en- ny culture is making it known to everyone dorse collaborative process, employee within the organization. This lays the foun- Today, a healthy, positive independence, internally-driven work pro- dation for everyone to be on the same page cess and a family-like atmosphere. company culture is at and allows each individual to participate in the top of the qualities Today, a healthy, positive company culture driving the organization towards one uni- is at the top of the qualities that job seek- fied goal. that job seekers hope to ers hope to find when looking for their new For example, the founder and CEO of Bolt, find when looking for job. However, it’s one thing to be aware of Markus Villig, famously quipped that the the concept and an entirely different one to their new job. initial company culture revolved around the successfully implement it in real life. idea that “there are no rules”. This has been a driving factor in continuing their rapid growth and “move fast and break things” With the startup scene starting to take attitude. This is still reflected in their ap- on its current form only sometime around proach to hiring, where they emphasize 2011, Estonia, Latvia and Lithuania had a lot employee adaptability and resilience. to take in over a very short period of time. However, all three states seem to fare rela- Startup Wise Guys, meanwhile, has a set tively well when it comes to global entrepre- of clearly-defined, get-shit-done-centric neurial ratings and we believe that adapting values, which must be continually com- the culture-driven company approach has municated, as their program participants had a significant impact on that. Is it an ac- change with every batch. Being clear on curate mirror image of the way companies what they stand for and what their approach operate in Silicon Valley? Well, not exactly. is has helped attract startups and various partners that share the same values. As of this year, they have included a company
100+ founders at the annual Startup Wise Guys Getaway in Spain 66 Longer Reads
culture and performance module in the ac- conversations on mental health, and Bud- celeration program, and teach their start- dist monks leading meditation exercises. It ups early on that aside from product devel- Regardless of the values is no surprise, then, that these values have opment, they actually have a company and chosen by the startup, trickled further into the cultural fabric of team to build. local startups. the most important factor A different approach to the implementa- tion of company culture is demonstrated in its implementation THE PRESENT AND THE by Printful, which provides new employees is the clear and regular FUTURE OF CULTURE- with a list of must-read books, such as “Re- communication of them, work” by Jason Fried and Daniel Heinemeier DRIVEN COMPANIES IN Hansson to teach employees principles on in any way possible. “working smarter, not harder”. This contrib- THE BALTICS utes to the overall goal of maintaining a lean With a high number of operating startups, startup approach to a rapidly scaling com- tech hot spots, great entrepreneurial po- pany. Culture of mental health tential score on the global chart and un- Regardless of the values chosen by the One aspect of company culture that is re- deniable zeal for getting things done, the startup, the most important factor in its im- ceiving increasing amounts of attention in Baltics have their fair share of successful, plementation is the clear and regular com- the startup community is the topic of men- world-famous culture-driven startups. tal health, burnout, emotional resilience, munication of them, in any way possible. Is the culture-driven model working for and grit. them? Judging by the million-dollar invest- Yankov highlights that the Baltics are doing ments and new offices opening all over the Ownership of culture a particularly good job at addressing the world, we’re inclined to believe it does. Is Culture doesn’t just materialize out of thin cultural aspect of mental wellbeing. there still some room left for growth? Ab- air – it requires a mindful approach to de- solutely. “The Baltics, comparatively, are doing quite fining and aligning responsibilities. This alright. For example, principles of Asian With nearly a decade’s worth of industry requires prioritizing the time to define mindfulness are not new, and are being ac- experience, plenty of role models, and core values. As noted by expert Stoyan tively implemented. While traveling around increasing international recognition, it’s Yankov, startups can take rather different I still run into startups relying on sweets about time for the companies operating in approaches in the process. He has inter- and energy drinks to push through produc- the Baltic states to offer their original take viewed a number of Baltic startups for a tivity barriers rather than a health-based on company culture to the rest of the world. book on performance that he is co-author- approach.” ing with Cristobal Alonso. These trends seem to echo in the start- “Take for example the founders of Printify up products as well, for example, one of and Nordigen. Both are successful compa- the currently trending Latvian startups nies from the region, and both agree that Asya.ai is developing a mindful conversa- values are important to talk about at an ear- Hubspot is one of the role- tion app, whereas freshly re-branded Lithu- ly stage. Yet - they have different approach- models in terms of company anian startup Qoorio (former Humansapp) is es towards the way it should be done. Prin- tapping into knowledge-sharing that is not culture in the startup world. tify believes the founders should be the based on career-related or academic expe- They have developed a Culture ones to set up the values in the first place, rience, but rather life lessons, thus creating Code. Interestingly, ever to build up the underlying DNA of the cul- a platform where people can connect and since first writing it down, the ture, and then have the team join them on learn from each other. the mission. Nordigen follows more or less company has changed the code the opposite approach. The team, while Mental health in startups and founders 25 times, proving that company guided by the founders and team leads, is is a topic that has been highlighted by culture is like a living organism. expected to take a leading role in defining thought-leading events, such as TechChill the values. The premise is that by including and the Digital Freedom Festival, bringing the team closely, they will be more likely to in specialists to talk about the need for “buy in” to the values and really live them.” FACT 39 Yankov highlights that there is no right or wrong approach, but that what is most important is consistency, and making the space for culture a priority. He highlights that this is not a “sexy” process, but is nec- essary, because when it’s time for a compa- ny to scale, it’s too late to start artificially implementing a culture.
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WHERE IN THE WORLD ARE BALTIC Turns out that founders from Lithuania were STARTUPS? most in favour of Valencia, Latvians favoured Barcelona, and Estonians stayed loyal to London.
The Baltic countries are a great LONDON – NOT ONLY A place to get your startup going. A progressive, tech-savvy society, MAGNET FOR FINTECH “It’s a question of availability of talent, which is a bit of a problem everywhere – fast internet connections, a com- London is one of the largest financial cen- everybody is chasing the same types of paratively low cost of living for a ters of the world, and by extension, equally people. But I guess in certain markets you quality lifestyle. But for startups impactful within a European context. There would find people more willing to work for is no shortage of Baltic startups that have that experience rapid growth, they startups and join the next big thing. These established a presence in London. might begin to start looking else- would be the typical startup hubs, like Ber- where to continue to stimulate Notably, fintech startups are particularly lin, Amsterdam, London. There are a lot of their business’ growth. drawn to London. This can be attributed startups around, people are used to them to the city being a major global financial and it’s not considered anything strange Interestingly, a few cities stand out as com- center – the UK is the highest net exporter for someone to go and change a very safe, mon destinations for growth relocation. of financial services globally, and London blue-chip company job for a startup job. In Research done by the European Startup held the title of “top financial center rank- Eastern European countries, I think we’re Heatmap demonstrates that most sur- ing” worldwide for five years in a row, until mentality not quite there yet.” says Lauri veyed participants highlight large cities as it lost it to New York amid Brexit uncertain- Haav, Head of International Expansion at their preferred “tech hubs”. In addition to ties in 2019. Monese. large cities, the Baltic countries had their own set of interesting preferences. It turns One such company is Monese. While being Similar to Monese, Revolut also began its out that founders from Lithuania were of Estonian origin, they opened their HQ Fintech development immediately within most in favour of Valencia (Spain), Latvians and started working exclusively within the the UK. Only recently has it reverted to its favoured Barcelona (Spain), and Estonians UK market, and only 4 years later spread Lithuanian origins by obtaining a Lithua- stayed loyal to London. to the Eurozone (in 2017). Besides London, nian banking license in order to provide EU they also have offices in Tallinn and Lisbon. transactions. We would be remiss not to What is it that makes different startup eco- They note that London offers a wide and mention TransferWise and TransferGo as systems gravitate to different cities? diverse, but expensive talent pool, while in Baltic Fintechs with heavy ties to the UK, We’re on the search to find out. Lisbon they are able to hire locals at a lower both with their headquarters, as well as cost. their original markets based there.
BALTIC STARTUP SCENE Report 2018—2019 68 Longer Reads
Attracting startups from various industries London demonstrates its strength as a startup ecosystem by attracting startups also from other industries. This clearly is a nod to the larger market as well as to the in- ternational hub and opportunities. Latvian 360 imagery startup, Giraffe360, started operating in London as soon as it could. In fact, they would pretend they were locally based before they even were, in or- der to ease the way of securing meetings with skeptical locals. “When developing products from Latvia, we would often speculate about what people want in that far-away international market. Rather than having to philosophize about what’s happening in the world, just go to the world. It opens your eyes to reality. When you’re in a far away, small market, you get used to In most cases, the thinking of competitors as something ab- reasons behind stract. But here, when you realize that 600 Cost-efficient hiring with a companies are pitching the same client wider talent pool relocation or opening with a slightly different product, you real- offices in Iberia ize how hard you have to fight for the same For some Baltic startups, the interest to client’s attention.” xplains Mikus Opelts, expand to these countries may be driven by are more related to founder and CEO of Giraffe 360. an interest in the Iberian market, and then standards of living and potentially expanding to Latin America. CRM software developer Pipedrive is anoth- For example, Printful opened an office in access to talent. er example of a startup that has expanded Barcelona after seeing sales in the Spanish internationally, including to London. One of market triple over the last year. However, in the reasons noted was to be able to be clos- most cases, the reasons behind relocation er to and to serve the “thriving financial and or opening offices are more related to stan- tech ecosystem”. Therefore the proximity dards of living and access to talent. The obvious choice – after to the market that Pipedrive had identified London was ruled out as a goal was an important factor, a testa- Not only are founders and their teams ment to the size and activity of London’s tempted by moving to sunnier shores, but Interestingly for a fintech startup, London SMB community. so are many talented international individ- was not Nordigen’s first choice for an inter- uals, who prefer the quality of life, good national office. After establishing in Riga, weather, food and wine in the cities like Latvia, their first international office was in CHASING THE SUN Barcelona and Lisbon. And while other Madrid, Spain. Though London offers plenty (SPAIN, PORTUGAL) large talent pools like London could still of available capital and funding, Nordigen’s seem tempting in terms of human resourc- product relies on open banking, and they While London is a common choice among es, the cost of talent is significantly lower considered the UK to have a relatively con- Baltic startup founders to relocate to, you on the Iberic coast. servative financial environment for their business. equally often hear of startups choosing For example, according to Payscale, the warmer climates in Western Europe. Name- median yearly software engineer salary in Portugal and Spain are certainly not glob- ly - in Portugal and Spain. London is 52,000 eur, while in Lisbon the al hubs such as London, though they do same profession has an average of 26,700 provide certain bonuses – a lower cost of eur per year. That’s almost half. living, an international bunch of individuals who populate the talent pool, and certain- As a result, it’s unsurprising that many ly not unimportant for the northerly Bal- growth-scale Baltic startups have open tic countries, they also provide a certain vacancies in Lisbon and Barcelona – in- amount of vitamin D that you just can’t get cluding Pipedrive, Monese, Mapon, Print- during the Baltic winters. ful, and more.
BALTIC STARTUP SCENE Report 2018—2019 69
other cities. Next to San Francisco and Tel Aviv, Berlin is one of the leading startup and tech hubs in the world. The city is an inter- BERLIN – STILL POOR Lithuanians – Berlin-bound national melting pot and coworking spaces are the ideal and flexible options to live and AND SEXY? Of the notable startups from the Baltics, breathe the concept of “New Work”.” those that have the most interest in Berlin Berlin is the second most populated city in are overwhelmingly from Lithuania. Berlin was described by its mayor Klaus Europe, behind London. Over the past five Wowereiet in 2003 in a slogan – “Berlin is Oberlo, the successful Lithuanian dropship- poor but sexy”. This was intended to attract years it has established itself as an attrac- ping platform that was acquired by Shopify, tive location for creative and tech start- students and young artists, to enjoy the is headquartered in Berlin. TransferGo, who low cost of living while simultaneously en- ups. On top of reasonable living costs, Ber- have offices in London and other locations, lin began its transformation into a startup riching the economy. Now, Berlin is ranked are also significantly present in Berlin. Tra- 19th in the Nomader’s list of best cities for hub when several high-profile investments fi opened offices in Berlin. Vinted shut its were made into local Berlin startups, such remote work (of over 1200). The city draws doors in places such as London, only to lat- plenty of creative, young individuals, who as $19M into Wunderlist and Bill Gates’ er open up again – in Berlin. investment of $35M into ResearchGate, are also then potential candidates in the job kicking off a focus on Silicon Valley-style pool for startups looking to hire. businesses and investments. “We opened the office in Berlin be- Many startups are looking to Berlin as their cause of two reasons: first, Ger- next location for their office, including -fin many was our biggest market and tech startup Mintos: we needed to fix it. Second, it was a good place to attract international talent that would not so easily move CONCLUSIONS “It made perfect sense to set up an to Vilnius.” As startups grow, they inevitably face the office in the capital of Germany - we - Thomas Plantega, question of expansion. Whether to ex- have a lot of investors in Germany, CEO of Vinted pand, and if so, where to. We can see that also it is a big draw to access the in terms of Baltic startups, clear frontrun- Berlin talent pool. Our team now has ners in Europe can be found, and those are professionals joining Mintos from Why are Lithuanians so drawn to Berlin? London, Berlin, Spain, and Portugal. Paypal, N26, Zalando and other in- Edita Lobaciute is the Global Community The reasoning for expansion to different dustry companies.” Lead at one of the major coworking spaces cities can vary – growing human resource - Mindspace. She says: - Mārtiņš Šulte, accessibility, or for increasing proximity Mintos CEO and Co-Founder “The city feels a bit like a start-up itself. to the target market. What’s interesting is You can feel the movement and creativi- that for the most part, the target cities with ty everywhere. Berlin is a very attractive a strong foothold, at least for the Baltics, city, still pretty low cost in comparison with don’t change.
BALTIC STARTUP SCENE Report 2018—2019 70 Ecosystem METHODOLOGY
This report is created as a collection, comparison, and analysis of publicly available information, combined with data and insights from 25+ stakehold- ers from the Baltic startup ecosystem (startup organisations, VC funds, Busi- ness angel associations and individual CREDITS investors, accelerators, startups, sup- port organisations, governmental en- This report is a result of the joint efforts tities and opinion leaders). Data about between EIT Digital and Startup Wise Guys. Baltic countries has been benchmarked It could not have been completed without against other regions, cities and coun- the help of various organizations and indi- tries to provide a unique angle in startup viduals who have participated by providing ecosystem analysis. their insight, knowledge, and perspectives that shaped this report. It is also made pos- sible by the various previously published Both quantitative and qualitative meth- research that this report was abe to use as ods have been used in the research pro- a foundation to build on. cess. In some cases, data has been in- terpreted and analysis offered through EIT Digital is a leading European digital in- the lense of the joint EIT Digital and novation and entrepreneurial education Startup Wise Guys perspective. organisation driving Europe’s digital trans- formation. Its way of working embodies the future of innovation through a pan-Euro- A lack of publicly available, compre- pean ecosystem of over 200 top European hensive registered data on the current corporations, SMEs, startups, universities state of startups within the Baltics has and research institutes, where students, caused us to turn to the next best thing researchers, engineers, business devel- - crowdsourced data - which has been opers and entrepreneurs collaborate in an compiled by each of the Baltic states open innovation setting. This pan-Euro- since 2008. This data has not only been pean ecosystem is located in Amsterdam, trusted by us, but has also been used as Berlin, Braga, Budapest, Brussels, Eind- the foundation for reports by the Minis- hoven, Edinburgh, Helsinki, London, Ma- try of Economics of Latvia, Karma VC, drid, Milano, Munich, Nice, Paris, Rennes, and more. Stockholm, Trento, and San Francisco. www.eitdigital.com As the data used mostly relies on pub- licly available information, a possibility Startup Wise Guys is Europe’s leading B2B exists that the data does not reflect a startup accelerator, present in all three Bal- comprehensive and definitive status of tic states with participants from around the the topic at hand. With these limitations world, also voted VC fund of the year 2019 in in mind, analysis has been made to the CEE. SWG displays a 77% survival rate, and best of report authors’ ability and taking is one of the most active early stage inves- the most trustworthy raw data available. tors in the Nordics & CEE region with more Though the data may contain gaps in in- than 145 portfolio companies. formation, it does not diminish the re- port’s ability to point to tendencies. www.startupwiseguys.com
BALTIC STARTUP SCENE Report 2018—2019 71
CONTRIBUTORS
Merilin Lukk, Marily Hendrikson, Startup Estonia Liva Perkone, Latvian Startup Association Startin.lv Egita Polanska, Startin.lv, Startup Wise Guys Olga Barretu, Emils Darzins, Magnetic Latvia Startup Roberta Rudokiene, Egle Karciauske, Startup Lithuania Anu Oks, Dolores Daniel, EstBAN Marta Matisone, LatBAN Daiva Jankauskaite, LitBAN Skaiste Budbergyte-Zabielaite, LT VCA Kalev Kaarna, Superangel Rudolfs Neimanis, Buildit Latvia Voldemars Bredikis, Commercialization Reactor Jean-Baptiste Daguene, Aivaras Rastenis, 70Ventures Max Postnikov, Baltic Sandbox Andris Berzins, Change Ventures Toby Moore, Martins Lasmanis, Imprimatur Capital Arvydas Bloze, Donatas Keras, Practica Capital Lita Grafa, KPMG Latvia Ernests Stals, TechHub Riga Davids Stebelis, Solvita Kostjukova, ALINA DATA SOURCES Danielius Stasiulis, BitDegree, Civitta.lt Vilija Sveikauskiene, INVEGA Latvian Startup Association Marek Unt, Nikolai Kabatsikov, Bolt Startup Lithuania Raph Crouan, Disrupt Venture Startup Estonia Pawel Maj, bValue Baltic Startup Scene Report 2017/2018 Anna Andersone, Riga Tech Girls Estonian, Latvian, Lithuanian open-source in- Clare Lain, NATO Cyber Defence Centre of Excellence vestment data sheets Renata Sumskaite, Women Go Tech Ministry of Economics of Latvia Dagnija Lejina, Digital Freedom Festival DealBook of Ukraine 2019 edition, by AVentures Maarja Pehk, Latitude59 Nordic Venture Capital report, by Dealroom.co Farid Singh, Startup Wise Guys Central & Eastern Europe: Startup & Invest- Julia Jolkin, IT Talent Estonia ment Landscape, by Dealroom.co Davis Siksnans, Printful Google Public Data Explorer Raimonds Kulbergs, Salto.co Dealroom.co Petr Antropov, Lokalise Women in Digital Scoreboard 2019, Europa.eu Rimante Ribaciauskaite, Omnisend Women in Digital Scoreboard 2018, Europa.eu Astra Pudane, Amrop DOU.ua Lauri Haav, Monese Numbeo.com Mikus Opelts, Giraffe360 Wework.com Martins Sulte, Mintos Coworker.com Thomas Plantega, Vinted Investment and Development Agency of Latvia Edita Lobaciute, Mindspace (LIAA) Kristaps Banga, Accenture Latvia Organisation for Economic Co-operation and Stoyan Yankov, #perform framework Development (OECD) The Baltic Review Research and writing partners: @Truesix European Startup Heatmap Design: Liga Felta Crunchbase Tech.eu Copyright: EIT Digital, Startup Wise Guys, 2019
BALTIC STARTUP SCENE Report 2018—2019